What are the long-term effects of expensive gasoline?

WVXU recently reported that despite gas prices remaining high, Americans don't seem to be cutting back on spending much. 

Debashis Pal, David Sinton Professor of Economics at the Lindner College of Business, explained to WVXU that most consumers may still view the high prices as a temporary phenomenon. “If it goes on, we’ll change our expectations,” he explained.

Pal noted that consumers with higher incomes in particular have yet to adjust their spending habits. But he emphasized that the rising fuel costs are harder for those with lower income to ignore. “If you cannot drive your car, cannot go to work, you won’t get paid,” Pal said. 

He added that the broader market has yet to be affected by the shift in oil prices, either. “You don’t see the impact in the stock market yet. People still believe that things will be okay a few months down the road,” he said, noting that the macroeconomic view misses the impact on consumers right now.

Listen to the full WVXU interview. 

Featured image at top of a pile of money. Photo/Unsplash