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Gasoline prices, transport costs, and the U.S. business cycles

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  • Yilmazkuday, Hakan

Abstract

The effects of gasoline prices on the U.S. business cycles are investigated. In order to distinguish between gasoline supply and gasoline demand shocks, the price of gasoline is endogenously determined through a transportation sector that uses gasoline as an input of production. The model is estimated for the U.S. economy using five macroeconomic time series, including data on transport costs and gasoline prices. The results show that although standard shocks in the literature (e.g., technology shocks, monetary policy shocks) have significant effects on the U.S. business cycles in the long run, gasoline supply and demand shocks play an important role in the short run.

Suggested Citation

  • Yilmazkuday, Hakan, 2014. "Gasoline prices, transport costs, and the U.S. business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 45(C), pages 165-179.
    • Handle: RePEc:eee:dyncon:v:45:y:2014:i:c:p:165-179
    DOI: 10.1016/j.jedc.2014.06.002
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    1. Gasoline Prices, Transport Costs, and the U.S. Business Cycles
      by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog on 2016-12-19 07:35:00

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    Cited by:

    1. Ha, Jongrim & Kose, M. Ayhan & Ohnsorge, Franziska & Yilmazkuday, Hakan, 2023. "What Explains Global Inflation," CEPR Discussion Papers 18690, C.E.P.R. Discussion Papers.
    2. Yilmazkuday, Hakan, 2012. "Understanding interstate trade patterns," Journal of International Economics, Elsevier, vol. 86(1), pages 158-166.

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    More about this item

    Keywords

    Business cycles; Transport costs; Gasoline prices;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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