Kilian, Lutz; Zhou, Xiaoqing - 2020 - This version: September 9, 2020
The conventional wisdom that inflation expectations respond to the level of the price of oil (or the price of gasoline … explained by a large increase in gasoline prices. However, on average, gasoline price shocks account for only 39% of the … support for the conventional wisdom. Using a new structural vector regression model, however, we demonstrate that gasoline …
