TY  - UNPD
A1  - Kilian, Lutz
A1  - Zhou, Xiaoqing
T1  - The impact of rising oil prices on U.S. inflation and inflation expectations in 2020-23
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 670
N2  - Predictions of oil prices reaching $100 per barrel during the winter of 2021/22 have raised fears of persistently high inflation and rising inflation expectations for years to come. We show that these concerns have been overstated. A $100 oil scenario of the type discussed by many observers, would only briefly raise monthly headline inflation, before fading rather quickly. However, the short-run effects on headline inflation would be sizable. For example, on a yearover- year basis, headline PCE inflation would increase by 1.8 percentage points at the end of 2021 under this scenario, and by 0.4 percentage points at the end of 2022. In contrast, the impact on measures of core inflation such as trimmed mean PCE inflation is only 0.4 and 0.3 percentage points in 2021 and 2022, respectively. These estimates already account for any increases in inflation expectations under the scenario. The peak response of the 1-year household inflation expectation would be 1.2 percentage points, while that of the 5-year expectation would be 0.2 percentage points.
T3  - CFS working paper series - 670 
KW  - Scenario
KW  - inflation
KW  - expectation
KW  - oil price
KW  - gasoline price
KW  - household survey
KW  - core
KW  - pandemic
KW  - recovery
Y1  - 2021
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/62526
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-625267
UR  - https://ssrn.com/abstract=3983609
IS  - November 2, 2021
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -