A sign displays the prices of unleaded gasoline at a Chevron gas station in Palo Alto, California, US, on Tuesday, March 10, 2026.
David Paul Morris | Bloomberg | Getty Images
The war in Iran — and the accompanying spike in oil and gasoline prices — risks exacerbating the so-called K-shaped economy, economists said.
The term, which emerged during the Covid-19 pandemic, uses the letter K to illustrate diverging economic experiences: higher-income households do better and better, forming the upward arm, while lower-income households fall further behind on the downward arm.
Economists said a rise in oil and gasoline prices acts as a tax on household spending power that tends to hurt low earners more than the wealthy.
Nicholas Bloom, an economics professor at Stanford University, said he worries that the dynamic fuels the economy’s K shape.
“That, I think, is a major concern as an…
