Comments on: My Favorite Thoughts From Thomas Sowell’s “Basic Economics” (Part 1) http://allfinancialmatters.com/2009/07/14/my-favorite-thoughts-from-thomas-sowells-basic-economics-part-1/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Lindsay http://allfinancialmatters.com/2009/07/14/my-favorite-thoughts-from-thomas-sowells-basic-economics-part-1/comment-page-1/#comment-431136 Lindsay Wed, 22 Jul 2009 02:00:07 +0000 http://allfinancialmatters.com/?p=3693#comment-431136 I think the reason that gas prices do not follow a normal economic cycle is due to government(s) interference. When the government starts to step in , the normal supply & demand cycle gets thrown out of whack. I think the reason that gas prices do not follow a normal economic cycle is due to government(s) interference. When the government starts to step in , the normal supply & demand cycle gets thrown out of whack.

]]> By: Mark @ The Debt Hawk http://allfinancialmatters.com/2009/07/14/my-favorite-thoughts-from-thomas-sowells-basic-economics-part-1/comment-page-1/#comment-430213 Mark @ The Debt Hawk Wed, 15 Jul 2009 11:05:24 +0000 http://allfinancialmatters.com/?p=3693#comment-430213 I love Thomas Sowell's writing. I have been listening to this book using Audible. I love to listen to it when I go on a long drive. If you haven't checked out Audible, I highly recommend it. I love Thomas Sowell’s writing. I have been listening to this book using Audible. I love to listen to it when I go on a long drive. If you haven’t checked out Audible, I highly recommend it.

]]> By: Keith http://allfinancialmatters.com/2009/07/14/my-favorite-thoughts-from-thomas-sowells-basic-economics-part-1/comment-page-1/#comment-430156 Keith Wed, 15 Jul 2009 02:41:19 +0000 http://allfinancialmatters.com/?p=3693#comment-430156 I seem to remember a concept from my Econ course that might help explain the lag time for falling gas compared to rising gas prices, in an economic sense. I don't remember the exact phrase, but it essentially boils down to a lack in the change of demand. As the supply goes down, the price goes up. In response to rising prices, the demand should go down, but for gas in particular, it doesn't, because people either don't change their consumption, or find that significant changes (buying a more fuel efficient car or moving closer to work), are difficult to put in place quickly. So the price of gas stays high, because the demand will support that price. As people change their consumption, the price slowly trickles down. This doesn't account for supply side issues (lower refinery production as a result of changes in oil price or demand for other petroluem products). Sorry for being so long winded, sometimes it helps me to spell everything out, even if no one reads this comment. If by the way I'm completely wrong, I'd love to know. I seem to remember a concept from my Econ course that might help explain the lag time for falling gas compared to rising gas prices, in an economic sense. I don’t remember the exact phrase, but it essentially boils down to a lack in the change of demand. As the supply goes down, the price goes up. In response to rising prices, the demand should go down, but for gas in particular, it doesn’t, because people either don’t change their consumption, or find that significant changes (buying a more fuel efficient car or moving closer to work), are difficult to put in place quickly. So the price of gas stays high, because the demand will support that price. As people change their consumption, the price slowly trickles down.

This doesn’t account for supply side issues (lower refinery production as a result of changes in oil price or demand for other petroluem products).

Sorry for being so long winded, sometimes it helps me to spell everything out, even if no one reads this comment. If by the way I’m completely wrong, I’d love to know.

]]> By: Gerard http://allfinancialmatters.com/2009/07/14/my-favorite-thoughts-from-thomas-sowells-basic-economics-part-1/comment-page-1/#comment-430152 Gerard Wed, 15 Jul 2009 02:21:55 +0000 http://allfinancialmatters.com/?p=3693#comment-430152 JLP, you might also find Hazlitt's Economics in One Lesson interesting. See: http://jim.com/econ/chap01p1.html JLP, you might also find Hazlitt’s Economics in One Lesson interesting. See: http://jim.com/econ/chap01p1.html

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