Oil Prices, and the Views of Economists

Just as the 1970s was characterized by hyper inflation, it looks like the 2020s may be characterized by deflationary cycling. Specifically, I am referring to the recently negative prices of oil futures that occurred around a month ago. Despite these crazy circumstances it appears that there are still many pundits, politicians, and economists grousing about inflation, it does appear we are entering a deflationary period. I think this is clearly partially to blame on the upbringing of the current stock of politicos, and economists that has led to the current stock of inflationary hawks. If we take that many of the theoreticians who currently populate global institutions at the highest levels were either trained in, or trained by people who lived through some of highest inflation experienced by the U.S. since the civil war. It makes sense that they would be especially worried about inflation. However, as we move away from this era of history it is clear that we need to see the future as not dictated by the past. In moving into this deflationary period it may be prudent to accept higher deficits in order to combat the coronavirus and growing unemployment. While we do not know the full impact of the virus on our economies in the long run, there is something we can pull from this previous history: the impact on academics. I suspect that many of my fellow 2020 college graduates that continue on in economics may end up being more focused on deflation than inflation, maybe even to the point of detriment. In the end, while these cycles may not be the healthiest for discourse, they are the inevitable consequence of major events in shaping world views.

About Brennan

Brennan is a fourth year economics major at the University of Puget Sound.

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