Crude Oil Price and Inflation in the US since Covid-19

Research Article
Open access

Crude Oil Price and Inflation in the US since Covid-19

Tianhao Hao 1*
  • 1 Beijing Royal School    
  • *corresponding author 2278952081@qq.com
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/16/20231002
AEMPS Vol.16
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-75-1
ISBN (Online): 978-1-915371-76-8

Abstract

Focusing the period of Covid-19 since January of 2020, this research empirically study how inflation and the price of crude oil are related within the US data. The linear regression with ARCH(1) model is employed and our empirical results illustrate the significantly positive correlation between these two factors. We find that the CPI increase 9% with one unit increase in the crude oil price during Covid-19 period. Crude oil price, however, does not show such a significant effect on the other macroeconomic variable in the US during Covid-19 period, for example, real consumption and GDP.

Keywords:

crude oil price, inflation, relationship, significantly positive, Covid-19 period

Hao,T. (2023). Crude Oil Price and Inflation in the US since Covid-19. Advances in Economics, Management and Political Sciences,16,182-188.
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References

[1]. Hamilton, J. D. (2009). Causes and consequences of the oil shock of 2007-08. Technical report, National Bureau of Economic Research.

[2]. Aghababa, H. and W. A. Barnett (2016). Dynamic structure of the spot price of crude oil: does time aggregation matter? Energy Economics 59, 227–237.

[3]. Narayan, P. K., D. H. B. Phan, and G. Liu (2021). Covid-19 lockdowns, stimulus packages, travel bans, and stock returns. Finance research letters 38, 101732.

[4]. Devpura, N. and P. K. Narayan (2020). Hourly oil price volatility: The role of covid-19. Energy Research Letters 1 (2), 13683.

[5]. Bruno, M. and J. Sachs (1982). Input price shocks and the slowdown in economic growth: the case of uk manufacturing. The Review of Economic Studies 49 (5), 679–705.

[6]. Hamilton, J. D. (1983). Oil and the macroeconomy since world war ii. Journal of political economy 91 (2), 228–248.

[7]. Davis, M. and J. D. Hamilton (2003). Why are prices sticky? the dynamics of wholesale gasoline prices.

[8]. Hooker, M. A. (2002). Are oil shocks inflationary? asymmetric and nonlinear specifications versus changes in regime. Journal of money, credit and banking, 540–561.

[9]. Shitile, T. S. (2020). Disaggregated inflation and asymmetric oil price passthrough in nigeria.


Cite this article

Hao,T. (2023). Crude Oil Price and Inflation in the US since Covid-19. Advances in Economics, Management and Political Sciences,16,182-188.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN:978-1-915371-75-1(Print) / 978-1-915371-76-8(Online)
Editor:Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.16
ISSN:2754-1169(Print) / 2754-1177(Online)

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References

[1]. Hamilton, J. D. (2009). Causes and consequences of the oil shock of 2007-08. Technical report, National Bureau of Economic Research.

[2]. Aghababa, H. and W. A. Barnett (2016). Dynamic structure of the spot price of crude oil: does time aggregation matter? Energy Economics 59, 227–237.

[3]. Narayan, P. K., D. H. B. Phan, and G. Liu (2021). Covid-19 lockdowns, stimulus packages, travel bans, and stock returns. Finance research letters 38, 101732.

[4]. Devpura, N. and P. K. Narayan (2020). Hourly oil price volatility: The role of covid-19. Energy Research Letters 1 (2), 13683.

[5]. Bruno, M. and J. Sachs (1982). Input price shocks and the slowdown in economic growth: the case of uk manufacturing. The Review of Economic Studies 49 (5), 679–705.

[6]. Hamilton, J. D. (1983). Oil and the macroeconomy since world war ii. Journal of political economy 91 (2), 228–248.

[7]. Davis, M. and J. D. Hamilton (2003). Why are prices sticky? the dynamics of wholesale gasoline prices.

[8]. Hooker, M. A. (2002). Are oil shocks inflationary? asymmetric and nonlinear specifications versus changes in regime. Journal of money, credit and banking, 540–561.

[9]. Shitile, T. S. (2020). Disaggregated inflation and asymmetric oil price passthrough in nigeria.