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Current location:HOME>> News>> Company News>> It Turns Out That Oil Prices Just Don’t Matter
It Turns Out That Oil Prices Just Don’t Matter
AUTHOR:admin PUBLISHED:2016-09-21 CLICK:正在读取

Oil is not just the fuel that runs our cars. It’s also the fuel that runs our economies.

Petroleum is a feedstock for plastics and petrochemicals. It provides heat and electricity. And of course, it provides the primary means by which we move all of the goods we produce, and the workers who produce them, and the consumers who consume them. It is a critical member of a class of product that economists call “intermediate goods” — goods that are used to produce other goods and services.

As you can imagine, oil prices are thought to have a big effect on the economy. When prices rise, that tells us that oil is scarce relative to demand, and therefore that we can make and consume less stuff than we’d like to. When prices fall, we are lolling about in unexpected bounty. A new paper by economists Christiane Baumeister and Lutz Kilian attempts to estimate just how big an effect the recent sharp decline in oil prices has had on the gross domestic product of the U.S. Their answer is … none.

That’s right, none. There was a stimulative effect on the consumer side, but it was offset by the loss of investment in the oil sector. They write:

Our analysis suggests that this decline produced a stimulus of about 0.7 percentage points of real GDP growth by raising private real consumption and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit. This stimulating effect, however, has been largely offset by a reduction in real investment by the oil sector more than twice as large as that following the 1986 oil price decline. Hence, the net stimulus since June 2014 has been effectively zero.

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