Here is Alex Tabarrok, at the excellent Marginal Revolution:
“In standard macroeconomic models…the oil industry is no more important for understanding economic fluctuations than say the retail sales industry, since they are about the same size…
But I’ve always been skeptical. One reason is that rapid increases in the price of oil have preceded almost all U.S. recessions (see Hamilton’s papers) and such increases appear to be much more important than the size of the oil sector would allow.”
Me: My own view is that overall good economies are associated with low energy prices and high energy prices with weak economies… Much more so than who or what party is in power…
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