Supply and Demand and High Electricity Rates

Power plants take considerable time to propose, approve and build, and they are highly political issues. Thus while individuals and politicians may agree that new power plants are needed, no one necessarily wants to build the plants in their community--they are an eyesore and they can (in the case of nuclear plants) be dangerous. Add to the concern of nuclear energy the issue of building environmentally sensitive plants regardless of their technology, and the supply side of the equation remains stagnant, as it has for three decades in New York (although new plants are coming on line in the next few years).

But demand for electricity has also grown at a much higher rate than was predicted by so-called experts decades ago (when decisions about power plants that are coming on line now were made). No one could foresee the incredible increase in electricity demand created by computers and electronic gadgetry, and electricity demand has far outpaced supply as a result. The utility industry in New York (and elsewhere) thus demonstrates what happens when supply and demand do not behave as expected: shortages and price increases occur in the short-term (higher electric

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of the World Economy World economic trends in the late 1990s were actually quite different from those in the United States. The United States experienced fast growth while the world economy decelerated sharply in 1998 and only made a modest recovery in 1999. The 1998 slowdown was due to a number of factors: * The crises in Asia and Latin America. * The meltdown in Russia's economy. * Continued economic doldrums in Japan. However, the preliminary estimates show 2000 to be a strong year for the world economy. In the late 1990s, the strong performance for the U.S. economy relative to the rest of the world meant that our nation was an attractive place for investment. The strong inflow of funds seeking U.S. investments helps explain the strong dollar and the unfavorable balance of trade. In early 2001, the U.S. economy is expected to be weaker compared to a strong world economy. This would probably weaken the dollar both with respect to the Euro and other currencies. The forecasts are for the Euro to strengthen to about parity with the dollar by the end of 2001. The current rate is about 90 cents to the dollar. Obviously, the Euro was overvalued when it first came out, and it probably won't return to that level.
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Some common words found in the essay are:
Federal Reserve, Real GDP, Rafik Hariri, Demand York, Con Ed, Stock Market, Inflation CPI-U, Israelis Palestinians, Greene Oswego, Latin America, fiscal policy, power plants, federal reserve, supply demand, recession index, current account, growth rate, real gdp, tax cuts, copyright 2001, text copyright 2001, exchange rate lbp/us$, relative rest world, current account balance, external debt us$bn,
Approximate Word count = 5127
Approximate Pages = 21 (250 words per page)

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