Would Higher Commodity Prices Help the Economy?
Would Higher Commodity Prices Help the Economy? Wednesday July 22, 2009#spacer{clear:left}#abc #sidebar{margin-top:1.5em}zSB(3,3) A reader asks: Do you think that a surge in commodity prices would have positive effect on our economy? Until economic growth picks up, a surge in commodity prices would lead to inflation, and would have a negative affect on the U.S. economy. An increase in oil prices would raise costs for companies who could not pass on higher prices to consumers. This lower profit margin would lead to more layoffs. Higher commodity prices would also create hardship for families who are already strapped for cash. A 2004 analysis by the International Energy Agency (IEA) said the effect of a sustained $10 per barrel increase in oil prices would lower world GDP by at least 0.5% in the following year (MEES, May 10, 2004). In 20
#spacer{clear:left}#abc #sidebar{margin-top:1.5em}if(zs>0){zSB(3,3)}else{gEI(“spacer”).style.display=’none’;gEI(“sidebar”).style.display=’none’} A reader asks: Do you think that a surge in commodity prices would have positive effect on our economy? Until economic growth picks up, a surge in commodity prices would lead to inflation, and would have a negative affect on the U.S. economy. An increase in oil prices would raise costs for companies who could not pass on higher prices to consumers. This lower profit margin would lead to more layoffs. Higher commodity prices would also create hardship for families who are already strapped for cash. A 2004 analysis by the International Energy Agency (IEA) said the effect of a sustained $10 per barrel increase in oil prices would lower world GDP by at least 0.5% in the following year (MEES, May 10, 2
