Will resource constraints bind in the next boom?
I'm kind of seeing the same thing as Paul Krugman here : The Oil Bubble Controversy, Revisited One of the curious things about economic debate in the later Bush years was the conviction among many on the right that there wasn’t a bubble in housing, but that there was one in oil . We now know the truth about housing. But what about oil? Oil prices did spike to triple-digit levels in early 2008, then drop sharply. But think about the fact that right now, with the world economy still seriously depressed, oil is at $80 a barrel. This suggests to me that high oil prices are largely caused by fundamentals. And it also suggests that resource constraints will be an issue if and when we do get a full recovery. But I'm looking more at agricultural commodities. While prices have come down a lot from the summer of 2008 I didn't see a lot of evidence of a speculative bubble then. And I would have thought that a worldwide recession a large as the one we're in would hav