[Aaron]

Excel

Thoughts?

[markam]

It appears that the price as a percentage of GDP is higher than every year except 1979 and 1980.

And of course, 1979 to 1980 is the only year in which the US GDP went down since 1933.

Anybody want to place a bet about whether or not the US GDP will be lower in 2006 than it was in 2005? I will give you good odds if you are stupid enough to want to bet on it going up.

[Lehyina]

Another observation is that the rise in cost as percent of GDP was much more rapid in 1973 and 1979 than has been happening more recently. Hence the economic impacts so far have been more gradual than during the previous oil price shocks.

[Macsporan]

Adjusted for inflation?

[Lehyina]

The chart shows a relative measure which is net oil import cost (nominal) divided by GDP (nominal), both of which are not adjusted for inflation. Of course real GDP could be used instead of nominal GDP but then the net oil import cost would have to be adjusted for inflation as well. If the same inflation series is used for the adjustment of cost and GDP the relative measure cost/GDP will remain the same.

[Tyler_JC]

$this->bbcode_second_pass_quote('markam', 'I')t appears that the price as a percentage of GDP is higher than every year except 1979 and 1980.

And of course, 1979 to 1980 is the only year in which the US GDP went down since 1933.

Anybody want to place a bet about whether or not the US GDP will be lower in 2006 than it was in 2005? I will give you good odds if you are stupid enough to want to bet on it going up.

[Lehyina]

$this->bbcode_second_pass_quote('', 'R')emember, we will be using government data for our 2006 economic recession prediction. And they lie...

[markam]

$this->bbcode_second_pass_quote('', 'A')nd they lie

[Tyler_JC]

$this->bbcode_second_pass_quote('markam', '')$this->bbcode_second_pass_quote('', 'A')nd they lie

[pup55]

This is a fine spreadsheet.

$80 per barrel and 3% GDP spent on oil imports is the approximate pain threshhold that will finally cause the recession.

Side question: Are the $80 and $115 estimates your "official predictions" of pricing in 2006 and 2007?

[Lehyina]

$this->bbcode_second_pass_quote('', 'S')ide question: Are the $80 and $115 estimates your "official predictions" of pricing in 2006 and 2007?

[Lehyina]

pup55, I have done a separate spreadsheet for the Australian economy which looks especially interesting because its domestic crude production has been plunging by around 10% per year on average for the last few years. Would really like to examine a few other economies but so far I have found it hard to obtain the GDP series over a long enough time period for any countries other than USA and Australia. Do you know any suitable sources?

[pup55]

IMF Database

The IMF database might be suitable for such a thing. It will let you go back to 1980, which is far enough to catch the second oil shock.

[Lehyina]

$this->bbcode_second_pass_quote('pup55', '[')url=http://www.imf.org/external/pubs/ft/weo/2005/01/data/index.htm]IMF Database[/url]

The IMF database might be suitable for such a thing. It will let you go back to 1980, which is far enough to catch the second oil shock.

[pup55]

Yeah, well this is the Wolfowitz-inspired prediction. I'm surprised it's that low.

Hopefully the historical database is more or less accurate.