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Article: Implications of higher oil prices for U.S. industry.
- Article from:
- Business Economics
- Article date:
- January 1, 1991
- Author:
CopyrightCOPYRIGHT 1991 The National Association for Business Economists. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Iraq and Kuwait produced 8 percent of the world's oil supplies prior to the United Nations' embargo. A shooting war in the Persian Gulf could encompass countries producing a combined 26 percent of the world's oil. An input-output analysis found that a 50 percent increase in oil prices from the 1988 level raises overall costs some 1 percent in the U.S. business sector, about equal to this year's expected real economic growth. However, the price impact is not distributed evenly across aU segments of the economy. Higher energy prices are likely to result in a lower standard of living for U. S. consumers.
TWO MONTHS AFTER Iraq invaded Kuwait, the world market price ...