Responding to a reader's question, I updated this chart using the latest GDP data. Even when oil prices were at their peak last year, the average consumer spent less than 7% of his income on energy. Today that has fallen to a little over 5%, and it has only been lower in a handful of years. As a nation, we have become much more energy-efficient since the early 1980s, mainly in response to rising energy costs.
Saturday, May 9, 2009
Energy costs are not very burdensome
Responding to a reader's question, I updated this chart using the latest GDP data. Even when oil prices were at their peak last year, the average consumer spent less than 7% of his income on energy. Today that has fallen to a little over 5%, and it has only been lower in a handful of years. As a nation, we have become much more energy-efficient since the early 1980s, mainly in response to rising energy costs.
Here is an article from the Brookings Institute that attributes in part, the oil shock of 2007/08, to the collapse in the economy.
ReplyDeleteWe could have a 2008 redux already baked into the cake.
http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_hamilton.pdf