Monday, April 14, 2008
In Other Good News
by Tom Bozzo
As a microeconomist, I'm perhaps less inclined than some you'll read to wring my hands over the Fed's possible softness on commodity-price inflation. We occasionally get the notion that increasing prices for some goods should be interpreted as a signal to consume substitutes in greater quantities. You might indeed wonder if trying to reduce the price of oil through means that involve throwing millions of people out of work is a worthwhile Fed initiative.
Peak Oil goes to Russia. Hey, and I was pretty close to $2/day in fuel savings from the bike commute as things stood.
As a microeconomist, I'm perhaps less inclined than some you'll read to wring my hands over the Fed's possible softness on commodity-price inflation. We occasionally get the notion that increasing prices for some goods should be interpreted as a signal to consume substitutes in greater quantities. You might indeed wonder if trying to reduce the price of oil through means that involve throwing millions of people out of work is a worthwhile Fed initiative.
