I figure that one way to invalidate the claim that oil causes inflation would be to look at price data to see whether oil rises before other prices or vice wersa. Anyone know how to go about doing so?
Why not just look at price elasticity of demand for oil?
World crude oil demand has a price elasticity of -0.4. That’s only a little less sensitive than food prices, with wheat having a figure of -0.04.
It means that a mere 1% fall in oil production in any month will lead to a 2.5% increase in prices.