It is far from clear whether the recent plunge in international commodity prices in general, and in oil prices in particular, will provide a boost to the U.S. economic recovery. While those price declines would certainly provide the equivalent of a sizable tax cut for U.S. consumers, they will deliver a major blow to the increasingly important U.S. oil industry, as well as to commodity-producing emerging market economies. In so doing, they could cause serious strains in the U.S. and global financial system. Over the past year, the earlier super-international commodity boom has turned into a spectacular bust. International oil prices—which a little over a year ago had exceeded $100 a barrel—have declined by 70 percent to their present level of around $30 a barrel. Similar outsized price declines have been recorded in a wide range of other industrial commodity prices like iron ore and copper. It is not […]