The slump in oil prices, along with renewed concerns about Greece, have taken a toll on investor confidence in the past week or so, causing equity markets to fall and demand for safe-haven assets to rise. This partly reflects concerns about the impact of lower oil prices on energy companies and oil-dependent economies. However, for the world as a whole, the boost to demand from cheaper oil should outweigh these negatives. This will help to ensure that the world economy continues to grow at a steady, although highly uneven, pace. Lower oil prices will also drag inflation below zero in many advanced economies.
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