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This would seem to argue against prices going down in the medium term, because people need to change their habits in order for that to happen.

By the time the price is ready to go down by 75%, the decline in world oil production or the increase in demand from developing countries will have picked up the slack.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Tue Jun 10th, 2008 at 06:24:59 AM EST
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Assuming that the high prices haven't collapsed their economies.
by Colman (colman at eurotrib.com) on Tue Jun 10th, 2008 at 06:26:21 AM EST
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Well, at that point we have to start getting actual macroeconomic data and doing the numbers to figure out where the strongest stresses are and thus where the likely breaking points are.

This situation is so past linear.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Tue Jun 10th, 2008 at 06:31:22 AM EST
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Way past linear.
by Colman (colman at eurotrib.com) on Tue Jun 10th, 2008 at 06:35:58 AM EST
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To paraphrase Amartya Sen on famines, if oil prices crash an economy it will be for political reasons.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Tue Jun 10th, 2008 at 06:32:26 AM EST
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Does that follow?
by Colman (colman at eurotrib.com) on Tue Jun 10th, 2008 at 06:37:37 AM EST
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It depends on the definition of crash.

You can have a decline in GDP without large swathes of the population falling into poverty, but it takes a massively interventionist economic policy on the part of everyone.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes

by Migeru (migeru at eurotrib dot com) on Tue Jun 10th, 2008 at 06:41:09 AM EST
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