Oil price shocks (shocks in the price of crude oil)

Unexpected increases in world crude oil prices have so far had a significant impact on output, growth, employment and financial stability in industrialized countries. Monetary policy has to react accordingly; however, it is very difficult to estimate these events (structural interruptions) in advance in its models. – However, the German economy’s dependence on oil was roughly halved between 1975 and 2005 as a result of cuts in consumption and greater use of other energy sources. In addition, the major oil-producing countries now use most of their revenues to import equipment. Germany benefits particularly strongly from this “recycling.” – See biofuels, petroleum inflation, petroleum-food nexus, petroleum price, hurricane shocks, purchasing power outflow, models, monetary, model uncertainty, Oil Bulletin, oil price equalization, petrodollar, ripples, commodity prices, shock, external, shock response, monetary. – Cf. Deutsche Bundesbank Monthly Report of June 2004, p. 20 f., ECB Monthly Report of July 2004, p. 29 ff. (detailed discussion of direct and indirect effects), ECB Monthly Report of September 2004, p. 48 f., ECB Monthly Report of November 2004, p. 55 ff. (with many data and also literature references), ECB Monthly Report of December 2004, p. 16 f. (oil price forecast), ECB Annual Report 2004, p. 47 ff. (impact of oil prices in the euro area in various respects), Deutsche Bundesbank Monthly Report of May 2005, p. 12 f. (burdens caused by higher oil prices), ECB Monthly Report of July 2005, p. 14 ff. (problems in recycling oil revenues of producing countries; tables), Monthly Report of the Deutsche Bundesbank of August 2005, p. 11 f. (high “setback potential”; two-page overview p. 12/13 with important explanations in the notes), Monthly Report of the ECB of January 2006, p. 14 ff. (causes of oil price movements), Annual Report 2005 of the ECB, p. 40 ff. (detailed analysis; valuable overviews), Monthly Report of the Deutsche Bundesbank of May 2006, pp. 12 f. (level and volatility of oil prices 1998 to 2006 with overviews), ECB Monthly Report of November 2006, pp. 47 f. (overviews, commentary on demand-driven market movements, such as introduction of gasoline-ethanol blend in the U.S.), ECB Monthly Report of April 2007, pp. 62 ff. (impact of petrodollar recycling on euro area exports; overviews), ECB Monthly Report of July 2007, pp. 85 ff. (important data relating to oil-exporting countries; overviews), ECB Monthly Report of July 2008, p. 67 ff. (demand by oil exporters mitigates the impact of price increases; overviews), Deutsche Bundesbank Monthly Report of July 2008, p. 48 (reaction of individual economic variables to an oil price shock), Cf. ECB Monthly Report of September 2008, p. 19 ff. (fluctuun-
of the oil price; role of index funds and speculators; ten), ECB Monthly Report of March 2010, pp. 16 ff (oil market 2000-2009; overviews), BaFin Annual Report 2009, p. 45 (no evidence of influence on oil price by financial investors), ECB Monthly Report of August 2010, pp. 81 ff (detailed explanation of the importance of the oil price for the euro area economy; many overviews; forecasts), ECB Monthly Report of January 2012, pp. 49 ff (annual oil price increases of just over five percent absorb income growth; explanations), ECB Monthly Bulletin of May 2013, pp. 83 ff (basic principles on the reliability of oil price forecasts; overviews; references), ECB Monthly Bulletin of October 2013, pp. 70 ff (fiscal aspects of consumer fuel prices; overview).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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