Are Energy Prices Cyclical?

The cyclical behavior of prices*

The procyclical behavior of prices has been a staple of business cycle lore since the work of the early NBER business cycle researchers. This paper reexamines that empirical fact. The aggregate data do not support procyclical price movements as a stable feature of the business cycle. The only episode where it is a robust feature of the data is the period between the two world wars, particularly...

On Prices’ Cyclical Behaviour in Oligopolistic Markets

We revisit the discussion about the relationship between price’s cyclical features, implicit collusion and the demand level in an oligopoly supergame where a positive shock may hit demand and disrupt collusion. The novel feature of our model consists in characterising the post-shock noncooperative price and comparing it against the cartel price played in the last period of the collusive path, t...

The Cyclical Behavior of Prices and Employee Compensation

Are prices procyclical? For many economists, they clearly are. As Lucas (1976, 104) put it, “The fact that nominal prices and wages tend to rise more rapidly at the peak of the business cycle than they do in the trough has been well recognized from the time when the cycle was first perceived as a distinct phenomenon.” More recently, however, other researchers have challenged the prevailing view...

Are Crude Oil, Gas And Coal Prices Co integrated?

Induced Innovation and Energy Prices

This paper uses U.S. patent data from 1970 to 1994 to estimate the effect of energy prices on energy-efficient innovations. It focuses on both demand-side factors, which spur innovative activity by increasing the value of new innovations, and supply-side factors, such as scientific advancements that make new innovations possible. Using patent citations as a measure of the usefulness of the exis...