Abstract
This paper surveys the literature on the economic effects of oil market developments. It assesses the economic theory behind oil price impacts and presents how the existing literature has analysed the link between oil markets—oil prices, oil price shocks, and oil price volatility—and economic outcomes. This review documents the general consensus amongst economists that the significance of moderate oil price movements is low if not inexistent, with clear impacts only present on financial markets. However, the evidence for significant macroeconomic effects of energy price shocks is strong, although methodological challenges such as causality and endogeneity remain an issue.KeywordsOil priceOil price shocksOil price volatility
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