Tuesday, September 11, 2007
Gas And Oil
Today OPEC agreed to expand output by 500,000 barrels a day, over, of course, opposition by countries such as Iran and Venezuela. Algeria also opposed the measure.
Gas and fuel pricing has huge implications for inflation. Gas prices also affect consumer confidence and directly change the amount of discretionary income consumers have. Diesel prices function as a type of VAT tax on the economy which gets slapped onto just about every product consumers buy, including, of course, gas itself. Diesel prices have risen over the year, and are offsetting some of the stimulus from gas prices:
Gasoline Prices and the Business Cycle