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> I think if you want clean air, $10 a gallon gasoline is a good start. This will be very disruptive. It's interesting to think about how, due to the price ine
by mullingitover 11y ago
> I think if you want clean air, $10 a gallon gasoline is a good start. This will be very disruptive.
It's interesting to think about how, due to the price inelasticity of gasoline, every penny in price increase results in a certain number of bankruptcies. My pet economic theory is that the gas price spike in the summer of 2008 is what tipped over the first domino in the global financial crisis. That was just a $2-3 per gallon spike. You're seriously advocating a $7+ dollar spike? If by disruptive, you mean collapse of society, sure. That would be very disruptive.
- ArkyBeagle 11y agoIt is beyond interesting. I don't think $10 gasoline would cause a ..."zombie apocalypse" level perturbation, but it would doubtless be bad. I, perhaps surprisingly, agree wholeheartedly with your pet theory. I have also read more than one (monetarist) economist who holds your pet theory, with a few modifications - the oil price spike was interpreted by the Fed as inflation so they did nothing to ease the money supply, worsening ( or some say starting) the whole shebang.