A counterintuitive notion: economic growth bolstered by high oil prices, strong oil demand

The standard comment that "high oil prices hurt economic growth" is totally undermined by real-world and real-economy trends.Comparing oil and natural gas price averages in the US in late 1998 with price averages in late 2003, we find that crude oil import prices and bulk gas supply prices have risen more than 200%. Meanwhile, claimed economic growth of the US economy was running at more than 7% on an annual basis in late 2003.It is therefore not difficult to argue that sharply rising oil and gas prices in fact increase economic growth rates, not the reverse. Logically, low or suboptimal economic growth rates would tend to lower energy demand growth rates, which in turn would lower oil an...

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