This Time Is Different is the title to Morgan Stanley’s latest Global Monetary Analyst report, which argues that this time the oil spike won’t have a big dampening effect on the economy.
Strategists Spyros Andreopoulos and Joachim Fels make a few arguments.
Here are a couple.
The first is that oil’s intensity of global GDP continues to decline.
Photo: Morgan Stanley
But then also this point:
Oil exporters will likely spend more of the wealth transfer than usual: With the risk of social unrest increasing, governments will be inclined to increase spending and transfers in order to maintain stability. This suggests that a larger part of the initial wealth transfer from net exporters to net importers will be reversed, over time, through goods imports of the former from the latter.