January 23, 2014

A DEFLATIONARY EPOCH:

Energy is gradually decoupling from economic growth (Izabella Kaminska, Jan 17, 2014, Financial Times)

"The widening gap between GDP and energy consumption illustrates the impact of falling energy intensity; and the gap between energy and CO 2 emissions reflects changes in carbon intensity, brought about by changes in the fuel mix. Without the projected decline in energy intensity, CO 2 emissions in 2035 would be more than 40% higher than our forecast, given the projected economic growth. The effect of the expected change in the fuel mix is much smaller - about one fifth as large - though bigger than in the past."

The question is, are inflation-concerned central bankers watching these trends? And if so, are they ready to adapt their models to a new, less-energy-intensive type of growth?
Posted by at January 23, 2014 6:14 PM
  
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