Category Archives: energy

Economic consequences of the high price of oil

All but one of the U.S. recessions since World War II have been preceded by a dramatic increase
in crude petroleum prices. Recent turbulence in energy markets has some analysts speculating that,
in the immortal words of Yogi Berra, it could be deja vu all over again. But this oil price shock
differs significantly from earlier episodes, leading me to believe that the economy will be able to
adapt to the new pricing environment without a major economic slowdown.

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What’s up with oil prices?

Oil prices made the third sustained run above $50 that we have seen over the last 9 months. Although the week-to-week price changes have been quite volatile, it appears that long-run factors, particularly strong oil demand from China and other developing counries, is the major story here.

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