Macro Musings Blog
Someone on CNBC noted this morning that China would not be able to sustain its demand growth at $100+ oil. What is that in economic lingo--elasticity of demand?Even demand in the United States has been leveling off recently.Unfortunately, it's still been growing strong in those countries which export (and subsidize) oil.
The silver lining I see in $100+ oil is that it creates the incentives for (1) investing in alternative energy and, as a result, (2) substituting out of our oil addiction.
David,That graph looks like demand has been relatively stable in China. If that is the case, why all the talk about an emerging China and India being a/the catalyst for surging oil prices?Josefer
Jose,According to the chart, in 2000 China was consuming 5000 barrels per day. In 2006 it was consuming about 7000 barrels per day. That is a 40% increase in six years! Also, the figure does not show India or other Asian economies. I will try to find some data that speaks to this issue and post it later.