A mid-weekly roundup of peak oil news, including: -Developments this week read more

Although the S&P 500 is essentially flat from its closing level one week ago, bullish sentiment saw a big improvement over that time.  According to the weekly survey from the American Association of Individual Investors (AAII), bullish sentiment rose from 27.6% to 35.4%.  This is the highest level since the first week of April and the largest weekly jump since the week ending February 9th.

Christopher J. Erceg and Jesper Linde. This paper uses a New Keynesian DSGE model of a small open economy to compare how the e?ects of fiscal consolidation di?er depending on whether monetary policy is constrained by currency union membership or by the zero lower bound on policy rates. We show that there are important di?erences in the impact of fiscal shocks across these monetary regimes that depend both on the duration of the zero lower bound and on features that determine the responsiveness of inflation.