In a blog on the economist web site, correspondent Matt Yglesias makes the following statement: (we) need to note that rising oil prices represent both demand shocks and supply shock to the American economy. Explain how increases in oil prices can cause shifts in both aggregate demand and aggregate supply . Source: Matt Yglesias, "Oil: When the Supply Shocks Are Demand Shocks and the Demand Shocks Are Supply Shocks," Economist, February 26, 2012.