Financial Times FT.com

The awful news for energy prices

By Robert Feldman

Published: July 5 2006 20:00 | Last updated: July 5 2006 20:00

Do not look for energy price stability soon. Lessons from fluctuations in pork prices in the 1930s, which became known as the hog cycle, provide an instructive framework for understanding future energy price movements.

The basic economics of the hog cycle were simple. The demand curve was downward-sloping, with demand quantity dependent upon the price at that point in time: there was greater demand for hogs when the price was low.

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