Wednesday, May 6, 2015

Why does a low oil price proof to be beneficial to GDP growth for some countries, but not for others?

This week's economists has two articles that relate a country's economic growth to the low oil price. We featured some forecasts earlier (here and here). With the first data coming in, the picture appears mixed (Quelle surprise!). 'Economists' are puzzled by the lack of economic boosts in the US, while Pakistan appears to reap the benefits. That sounds all a bit spurious to me.  However, the shared indicator seems price stability since, both are enjoying historically low inflation.

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