From November 1980 to February 1981, oil prices rose 45%, creating what economists term an oil shock. Although oil shocks have occurred multiple times since 1945, a broadly applicable description of how oil shocks affect economies at the national level has proved elusive, a problem typically attributed to the fact that oil shocks’ effects are substantially conditioned on country-specific characteristics (oil import-export ratios, most importantly). Recently, however, Gbadebo Oladosu et al. showed that economists’ estimates of national economies’ responsiveness to oil shocks are highly heterogeneous even within a given country and time frame—ranging by more than a factor of five in the case of the United States during a recent oil shock, for instance—suggesting that
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Verbal·Information and Ideas·Inferences
hardWhich choice most logically completes the text?
A
controlling for variations in countries’ oil import-export ratios may have obscured inconsistencies in economists’ findings about the effects of oil shocks at national levels.
B
economists’ conventional measures of national economic activity may be insufficiently sensitive to the effects of oil shocks.
C
methodological discrepancies in studies of oil shocks may have contributed to economists’ inability to provide a generalized model of oil shocks’ effects on national economies.
D
differences in oil import-export ratios from one country to another may account for more of the differences in the effects of oil shocks on those countries’ economies than economists previously believed.