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They lead to recession
Gail Tverberg, 1-17-2013, retired US actuary and writer for Our Finite World, , "Ten Reasons Why High Oil Prices are a Problem," Our Finite World, https://ourfiniteworld.com/2013/01/17/ten-reasons-why-high-oil-prices-are-a-problem/,LMS
4. Spikes in oil prices tend to be associated with recessions.
Economist James Hamilton thats.
When oil prices rise, consumers tend to cut back on discretionary spending, so as to have enough money for basics, such as food and gasoline for commuting. These cut-backs in spending lead to lay-offs in discretionary sectors of the economy, such as vacation travel and visits to restaurants. The lay-offs in these sectors lead to more cutbacks in spending, and to more debt defaults.
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