http://www.journalnow.com/servlet/Satellite?pagename=WSJ%2FMGArticle%2FWSJ_Columnist Article&c=MGArticle&cid=1031784454222&path=!opinio n!article&s=1037645509163
More likely than not... YES!
Excerpt:
This is not like the two "oil shocks" of the 1970s, when a sudden constriction in the oil supply drove the price sky-high. This price peak is driven mainly by rapidly rising demand in the emerging Asian economies and in the United States, so their people are still spending and the impact on the global economy is much less.
Moreover, the big oil producers now have much more developed economies than in the '70s, so they are also able to spend their extra income and keep the wheels turning. And developed economies are much less "oil-intensive" nowadays - it takes only half as much oil as it did in the '70s to produce the same amount of Gross Domestic Product - so oil price increases no longer lead to runaway inflation.
The important thing is that the median oil price for the next half-decade, say (until we run out of all the $40 oil), will be in the mid-$40s. That is good news in terms of the real crisis, climate change. That's high enough to encourage energy conservation and drive people toward alternative, preferably noncarbon energy sources, but it doesn't paralyze the economy. We will need more pressure from a higher price later on if we are to avoid a global climate disaster, but the economy can respond only so fast.
More likely than not... YES!
Excerpt:
This is not like the two "oil shocks" of the 1970s, when a sudden constriction in the oil supply drove the price sky-high. This price peak is driven mainly by rapidly rising demand in the emerging Asian economies and in the United States, so their people are still spending and the impact on the global economy is much less.
Moreover, the big oil producers now have much more developed economies than in the '70s, so they are also able to spend their extra income and keep the wheels turning. And developed economies are much less "oil-intensive" nowadays - it takes only half as much oil as it did in the '70s to produce the same amount of Gross Domestic Product - so oil price increases no longer lead to runaway inflation.
The important thing is that the median oil price for the next half-decade, say (until we run out of all the $40 oil), will be in the mid-$40s. That is good news in terms of the real crisis, climate change. That's high enough to encourage energy conservation and drive people toward alternative, preferably noncarbon energy sources, but it doesn't paralyze the economy. We will need more pressure from a higher price later on if we are to avoid a global climate disaster, but the economy can respond only so fast.
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