IT'S DIFFERENT THIS TIME: Why Higher Oil Prices Won't Kill The Economy

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.

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