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What you and I and all the other drivers in the country aren’t spending on gas could add up to hundreds of billions of dollars in savings. The savings will act as an economic stimulus, says Geoffrey Heal , professor at Columbia University’s business school.
“It will. Definitely,” he says. “We’re giving consumers significantly more spending power.”
“They have a little bit more money, but at the same time their investment are doing a little less well,” he says, “so they don’t necessarily feel that much richer.”
Low gas prices could have a negative impact on the stock market. Shares of oil producing companies might go down, so would our retirement funds which puts us in the mood to save, not spend.
Scott Wren, a senior equity strategist with Wells Fargo Advisors, says we have seen low gas prices act as an economic stimulus in the past. But that was then, and this is a recovering economy.
“In the past people were more prone to increase their spending. They were more prone to borrow money as well, do things like home equity loans,” she says. “And I think right now the mentality is a little different.”
At least we still like a deal.
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