A tweet from a politician trying to create some space on an issue many voters place some blame on him for.

in biden •  2 years ago 


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Not really getting this chart from the White House. It is a pretty common situation in economics where you see a price discoupling like this. It is called asymmetric pricing. Input prices (oil) will behave differently than output prices (gasoline).

It may mean prices rise faster than they fall.

For gasoline it can be caused by lags in inventory and changes in consumer elasticity of demand.

For gasoline it is even more likely as gasoline prices aren't solely dictated by oil prices. About 40% of gasoline prices are from sources besides the price of oil like taxes and refining and distribution costs. For a recent real-world example, gasoline prices recently went up a lot in California higher than the national increases. This was because of some issues with the refineries in the state. In response Governor Newsom transitioned to the winter fuel mixture sooner than normal to reduce prices.

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