EMF OP 72: The Historical “Roots” of U.S. Energy Price Shocks
Sustained energy price increases in the United States have preceded declines in economic activity as far back as 1890. This finding applies to two different historical GDP data sets. It suggests a much longer national experience with rising energy prices that began well before the period after World War Two. This problem emerged well before the US transition towards petroleum products when coal was an important energy source. This relationship varies with the state of the economy and appears less evident during some periods, as in the years following the 1929 stock market crash.