The general public, the consumer would not care about export, not if you are directly working in the export industry. Since then, most data have shown the economy moderating while still strong, a pattern that has continued through this week. Over the previous three sessions, crude-oil futures have plunged as the Clinton administration prepared to release oil from the nation's emergency reserves to ease the tight supply situation. Oil prices hit a 10-year high last week, raising inflation concerns among bond traders. The more subtle question has to do with why a higher oil price could build up inflationary expectation.
Inflation corresponds to a continuous price increase.
We have to delay the answer to this more subtle question after going over the third section of the course on Finacial Intermediaries and the Money creation process. Not only the bond traders are saying the above, the Federal Reserve officials are saying the same thing too. The subdued behavior of those expectations so far has contributed importantly to maintaining an environment conducive to maximum sustainable growth. Here is an interesting commentary on the recent fall in stock prices, rise in oil prices, inflation fear, etc. This will bring additional insights into Problem 2 in Quiz 2, and discussions surrounding the discussion of business cycle in chapter 5.