How do consumers assess the macroeconomic effects of oil price fluctuations? Evidence from U.S. survey data

We use survey data to study how consumers assess the macroeconomic effects of structural oil market shocks on the U.S. economy using vector autoregressive models. To structurally decompose oil price changes, we impose sign restrictions on impulse responses. We find that the survey respondents' expectations are qualitatively in line with the actual developments in most cases. Nevertheless, survey respondents underestimate the adverse effects of oil market shocks in some cases. We also find that respondents expect the central bank to stabilize inflation as well as output and that expectations are consistent with a standard Taylor rule.

• Publication year

  2019

• Venue

  Journal of Macroeconomics

• Publication date

  2019-12-01

• Fields of study

  Economics

• Identifiers
  DOI 10.1016/J.JMACRO.2019.103134
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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