It's not the latest jump in oil prices that takes a toll on the economy but the uncertainty over what will happen in the future. But getting a handle on such uncertainty is a difficult task.

When oil prices jump, people get jumpy-especially when the Fed is bumping up interest rate targets at the same time. Why? Because these two events have accompanied virtually every recession since World War II. At least until now.

An examination of the theoretical impact of an oil shortage on the U.S. economy and the problems that such shortages present for monetary policy.

An examination of how higher-priced oil affects various regions and business sectors, citing evidence that the oil shock accompanying Iraq's invasion of Kuwait will have a smaller impact on the overall U.S. economy than that of previous shocks.

The relationship between oil price shocks and U.S. macroeconomic fluctuations advocated by Hamilton (1983) broke down in the 1980s amidst a new regime of highly volatile oil price movements. Several authors have argued that asymmetric and nonlinear transformations of oil prices restore that...