American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
Oil Prices, Monetary Policy, and Inflation Surges
American Economic Journal: Macroeconomics
(pp. 468–501)
Abstract
We develop a simple quantitative New Keynesian model aimed at analyzing how the reaction of monetary policy contributed to the recent rise and fall in inflation. The model includes several shocks but features oil price shocks for two reasons: (i) energy prices have been among the central factors in discussions about the surge; and (ii) we can use identified oil shocks along with monetary shocks to estimate and discipline the model. We then employ the estimated framework to recover shocks without targeting inflation. Both the oil shocks and the shocks to policy accommodation played important roles in the inflation rise.Citation
Gagliardone, Luca, and Mark Gertler. 2026. "Oil Prices, Monetary Policy, and Inflation Surges." American Economic Journal: Macroeconomics 18 (4): 468–501. DOI: 10.1257/mac.20240295Additional Materials
JEL Classification
- E12 General Aggregative Models: Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
- E31 Price Level; Inflation; Deflation
- E52 Monetary Policy
- E62 Fiscal Policy
- Q35 Hydrocarbon Resources
- Q43 Energy and the Macroeconomy