Current Working Papers
The Impact of the 2026 Iran War on U.S. Inflation: A Scenario Analysis
Joint with Lutz Kilian, Alexander Richter and Xiaoqing Zhou.
Abstract: This paper shows how to assess the inflationary impact of the rise in the price of oil caused by the 2026 Iran War. We first generate projections of the quarterly price of oil from a calibrated DSGE model of the global economy under a range of scenarios and then incorporate these projections into a monthly VAR model of the impact of U.S. gasoline price shocks on inflation and inflation expectations. Our analysis speaks to the magnitude and persistence of the impact of higher oil prices on headline and core PCE inflation and on household inflation expectations.
Geopolitical Oil Price Risk and Economic Fluctuations
Joint with Lutz Kilian and Alexander Richter.
[Latest Working Paper] [Working Paper Appendix]
Abstract: Market participants and policymakers are concerned about major oil production shortfalls driven by geopolitical events. Even when such events never materialize, unanticipated increases in the probability of a production shortfall may generate a surge in the price of oil and oil price uncertainty. Our analysis provides the first systematic account of the quantitative importance of time-varying geopolitical risk to oil production for the global economy. We quantify the impact of actual and anticipated global oil production shortfalls on the price of oil and global growth, including the 2026 closure of the Strait of Hormuz, under alternative scenarios.
Unpublished Manuscripts
"Time-varying Oil Price Volatility and Macroeconomic Aggregates.” Joint with Nora Traum.