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252 comments on DrumBeat: May 16, 2006

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BrianT on May 16, 2006 - 12:43pm Permalink | Subthread | Parent | Comments top
The relativity is the important thing. Even though people love to drive, they only have one dollar to spend and at a certain price level they will decide that driving just isn't worth it (I am simplifying to make a point). Good point about wages- they are definitely not going to keep up with energy costs.
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ET on May 16, 2006 - 1:57pm Permalink | Subthread | Parent | Comments top
Yeah, relative income/purchasing power is sometimes forgotten in our focus on prices. If the unemployment rate goes up and/or wages creep downward, the effect is higher price for gasoline, etc. even if nominal price stays the same. If unemployment goes up drastically, even $1.50/gal could be expensive gasoline.
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tate423 on May 16, 2006 - 2:07pm Permalink | Subthread | Parent | Comments top
It's called the Purchasing Power Parity and it is available @ http://en.wikipedia.org/wiki/Purchasing_power_parity.

If things continued in terms of economic growth, by 2030 or so many countries will have passed us in PPP.

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