A recent study by the Dallas Fed found that the oil price surge to over $120 a barrel last spring had a limited impact on the US economy, cutting GDP by about 0.3%. This is a significant decrease from the estimated 5.6% cut in GDP that a similar oil shock would have caused in the 1980s.
Improved Efficiency and Reduced Dependence on Oil
The US economy has become less dependent on oil over the years, with the country now spending around 3% of its GDP on oil, down from 8% in the 1980s. Additionally, the US has become a net oil exporter, which has helped to mitigate the impact of oil price shocks.
The study also found that economic activity outside the US fell by 1.7% as a result of the war, but the impact on the US economy was relatively small. The researchers estimated that the economy is now more immune to oil price shifts than it was in the 1970s and 1980s.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
