Rising Cost of Gas and The economy

Rising costs of gas affect the economy and everyone in it, including business and consumer members as well as the general population. According to the EIA (2001), from 1997 to 1999, energy prices decreased, boosting the economy. If this had not taken place, steady prices would have reduced the growth rate of GDP by 0.3 percentage points. Following this period, energy prices first rose dramatically and then declined again. Over this four-year period, steady energy prices could have boosted GDP growth by 0.2 percentage points but the volatility found thwarted this growth potential (EIA 1). Volatility in gas and energy prices affects all consumers and producers.

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Category: Economics - R