John At The Center

I would also take issue with the authors’ assumption that oil prices are exogenous. For one thing, this assumption is at odds with the paper’s extended discussion about how the price of oil is determined by economic developments in the U.S. and other countries. Moreover, the assumption is probably not innocuous: previous research has shown that treating oil as endogenous in such models can greatly reduce the estimated effects of oil shocks.[5]

via Economist’s View: ‘Discussion of “Oil and the Macroeconomy: Lessons for Monetary Policy”‘.