Michael T. Owyang, E. Katarina Vermann
Given that Americans still spend a considerable portion of their budget on gasoline (just under 4 percent in 2012), it’s important to understand why gas prices don’t always move in sync with oil prices. The latter are determined in a more-or-less centralized market, but the market for gas is often local, with prices affected by location, season and taxes, among other factors.
A look at food prices in the two countries helps to explain the increasing correlation in their inflation patterns. One reason why their food prices are moving together is the increased trade between the countries.
Traditionally, research about recessions focused on the big picture—how the overall economy was performing. But recent economic studies have looked at the impact on specific groups. One of the interesting findings is that the highest earners are, by some measures, the most affected by recessions.