Obviously, caution is required in drawing generalizations from only three observations, and indeed many analysts do not place much credence in the link between oil prices and the business cycle. In part, this skepticism arises because the largely linear models that typically economists rely upon to track the ties between energy prices and gross domestic product do not signal a worrisome linkage.
When simulated over periods with observed oil price spikes, the models do not show oil prices consistently having been a decisive factor in the subsequent economic downturns. Our heightened wariness about recent developments, however, reflects the possibility that the responsiveness of U.S. gross domestic product to energy prices may be different when households and businesses are confronted with abnormal price hikes.