Econbrowser: Gasoline prices will fall even more
This is the sleeper issue in election 2006: if oil prices collaps, voters are happy. Happy voters tend to reward incumbents. And if Professor Hamilton says gas prices are coming down, we shuld all pay attention. Maybe the economic conversation will now deal with real issues like runaway federal spending. Stay tuned.
Even so, if we do get to $2.20 a gallon, it's hard to believe that won't provide some relief for sagging consumer sentiment and budgets, as indeed the prospective gasoline price drop looks quite similar to the favorable sequence last fall that may have helped the economy shrug off the GDP slowdown in 2005:Q4. There's no question that $3.00 gasoline has been one of the reasons some of us have been pessimistic about near-term economic prospects, and that reason for gloom at least has now vanished.
[Link]
