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We study the effects of oil-price shocks on the U.S. economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, we classify them into various event types. We then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional VAR approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand.

Petroleum products --- Petroleum industry and trade --- Energy industries --- Oil industries --- Mazut --- Petroleum --- Hydraulic fluids --- Prices --- Econometric models. --- Economic aspects --- Refining --- Investments: Energy --- Inflation --- Macroeconomics --- Industries: Energy --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- State Space Models --- Methodology for Collecting, Estimating, and Organizing Macroeconomic Data --- Data Access --- Price Level --- Deflation --- Business Fluctuations --- Cycles --- Energy and the Macroeconomy --- Energy: Demand and Supply --- Energy: General --- Macroeconomics: Production --- Investment & securities --- Petroleum, oil & gas industries --- Oil prices --- Oil --- Oil production --- Consumer price indexes --- Commodities --- Production --- Price indexes --- United States