The Oil Catch 22

by Patrick Appel

Roubini fears a double-dip recession. Free Exchange echos:

Growth above a certain rate will be sufficient to boost oil demand and prices up, dampening consumer spending and slowing expansionpotentially keeping the American economy from growing at a rate sufficient to decrease unemployment. That will be the dynamic until dependence on oil is sufficiently wrung out of the economy, which could take some time. This is yet another point arguing in favour of a prolonged and shallow recovery for the American economy.