The $110 Effect: What Higher Gas Prices Could Really Do to the Economy

At the Atlantic:
 

Rising oil and gasoline prices are once again threatening the U.S. economic recovery. It is no surprise that the root cause is geopolitical turmoil in the Middle East - this time related to Iran's nuclear ambitions and potential disruptions in oil supply.

At this point, it is the threat of Iranian oil supplies being removed from the market that is pushing prices higher. Saber rattling by Iran is contributing to the speculative price spike, perhaps a key strategy to maximize its oil revenue even with weaker volumes...

...Rising oil prices will harm U.S. economic growth. But what is the likely magnitude?...
 

Read the whole thing.