This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
4/11/2010
The Oil-pocalypse
Econbrowser posted an interesting article on their blog with lots of fun graphs about the cost of oil and it's effect on the recession. We have discussed in class the effects of rising prices during recessions and it doesn't take a genius to realize that they won't help us overcome these tough economic times. These gas prices may end up sparking production in the auto industry for even more fuel efficient cars as we could see gas prices are likely to reach $3.50 this summer. As college students, we have all been feeling the pain of gas prices rising but Econbrowser assures us that although "$87 oil is certainly not helping the recovery. But I would be very surprised if it proves to be the kiss of death."
Subscribe to:
Post Comments (Atom)
4 comments:
James Hamilton is the co-author of Econbrowser. He is a medium-lister for a Nobel prize.
Twenty-five years ago I was reading his stuff about the relationship between oil and recessions, and I didn't take it seriously. I'm still not sure I do.
But, about a year ago he came out with a paper pointing out that the current recession looks like a classic oil price spike caused recession. Now I'm sort'of a believer.
In an article in the Wall Street Journal, Spencer Swartz agrees that gas prices will have an average of $3 this summer, which is 20% higher than last year.
The International Energy Agency thinks that the rise in oil prices will cause people to drive less, and that will bring prices down. When oil prices were really bad a couple years ago, I don't remember this happening, and I don't know if it will be the result this time either.
http://online.wsj.com/article/SB10001424052702303695604575181303081072986.html?KEYWORDS=Oil+Prices&mg=com-wsj
Abigail: there is some flexibility there, but for the most part miles are inelastic with respect to the price of gas.
Abigail: there is some flexibility there, but for the most part miles are inelastic with respect to the price of gas.
Post a Comment