Incentives do matter — the oil edition
With oil pushing $67 a barrel, one might ask what the effect has been on the U.S. economy. The aggregate answer would seem to be a surprising “not much” — pergaps because, as in the seventies, petrodollars are being recycled back into the U.S. economy. Brad Setser, however, does observe one subtle change in oil ...
With oil pushing $67 a barrel, one might ask what the effect has been on the U.S. economy. The aggregate answer would seem to be a surprising "not much" -- pergaps because, as in the seventies, petrodollars are being recycled back into the U.S. economy. Brad Setser, however, does observe one subtle change in oil imports from June's trade data:
With oil pushing $67 a barrel, one might ask what the effect has been on the U.S. economy. The aggregate answer would seem to be a surprising “not much” — pergaps because, as in the seventies, petrodollars are being recycled back into the U.S. economy. Brad Setser, however, does observe one subtle change in oil imports from June’s trade data:
The US — obviously – is spending a lot more to import oil. The US oil import bill in the first half of 2005 was about $29 billion more than the US oil import bill in the first half of 2004. All told, I expect the US to spend about $57 b more on imported oil in 2005 than in 2004. The story is a bit different if you look at the amount of oil the US imports, not how much the US pays for it. Oil import volumes grew by 7.3% in 2003, and 5.7% in 2004. The pace of increase so far this year. Only 2.3%. Higher prices are having an impact.
Brad also has some good things to say about U.S. export performance. Readers are invited to speculate whether oil at, say $70 a barrel, would have stagflationary effects.
Daniel W. Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University and co-host of the Space the Nation podcast. Twitter: @dandrezner
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