James Hamilton

Many analysts had anticipated that a dramatic drop in oil prices such as we’ve seen since the summer of 2014 could provide a big stimulus to the economy of a net oil importer like the United States.

A drop in oil prices means less money in the hands of oil producers but more money in the hands of oil consumers.

Could the price of oil be a value such that the current quantity produced exceeds the current quantity consumed?

U.S. oil production has begun to drop in response to low oil prices, but not as dramatically as many had anticipated.

Among the disappointments in the 2015:Q1 GDP figures was weak consumption growth, which was a little surprising given the extra cash most consumers have on hand as a result of lower energy prices.

But another reason oil prices have slid so much is weakness in demand for the product, which may be related to a slowdown of overall world economic growth.