How the oil price lost its shock value

IF anything about the world economy could keep me awake at night, it would be neither the danger of another recession nor the alternative danger of fresh inflation arising from excess "liquidity".

It would be the possibility of a temporary fall in the price of oil.

David Walton, of the Bank of England monetary policy committee, recently gave a lecture entitled Has Oil Lost the Capacity to Shock? His main object was to explain why the current explosion in the oil price has had neither the inflationary nor the recessionary effect of previous shocks.

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