In this paper, we examine whether energy prices are cyclical and begin by looking at why the price of any good would be cyclical. With few explainable and largely insignificant exceptions, we find that energy prices are not responsive to the U.S. business cycle. We find that crude oil and...

The purpose of this paper is to outline the effects of energy price shocks in a small reduced-form model of the economy. I prepare the model and also discuss two complementary modeling approaches that were developed to test the theory