Higher oil prices have in the past led the developed economies into recessions...
There’s been an oil spike before every recession. The wiggly line [in the above chart] is the two-year percent change in oil prices. [The shaded blue areas are recessions.]*** ...note that the doubling [of oil prices] in 2005 didn’t get an immediate recessionary response — but higher gasoline prices will reduce the income people have to spend, and dent whatever recovery is going on in the consumer sector.
Correcting misconceptions about markets, economics, asset prices, derivatives, equities, debt and finance
Sunday, February 27, 2011
Will The Rise In Oil Prices Lead The US Into Another Recession?
Posted By Milton Recht
From "Oil Prices and Recessions, 40 Years’ Worth" by John Keefe:
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