Many economically literate bloggers are patiently trying to explain why the falling price of the dollar isn’t a direct cause of the rising cost of oil.

The flawed logic, as applied by Presidents Chavez and Ahmadinejad and some reporters from important American news outlets, goes like this: If the dollar falls and the price of oil, which is denominated in dollars, goes up, then surely the two must be related.

Thankfully, economists such as James Hamilton (econbrowser.com) are here to save us from such faulty reasoning.

To understand why such an idea doesn’t make economic sense, one should think about oil the way one thinks about gold: Although an ounce of gold may be priced in terms of dollars, it’s only by convention that it’s done so. An ounce of gold has intrinsic worth separate from how many dollars one can trade it for in the marketplace. So, even if the dollar falls in value, it doesn’t automatically make gold any less desirable. The same goes for oil.

Stephen Gordon, a professor of economics at l’Université Laval in Quebec City, Canada, illustrates this point on his blog, Worthwhile Canadian Initiative (worthwhile.typepad.org). Mr. Gordon’s graph shows the percentage increase in the price of oil across many different currencies: Even when priced in terms of euros and yen (which have shown no weakness lately), oil has become more expensive.

Strangely, the price for oil-exporting Canada has gone up even more in the month of November than for oil-importing America. “Blaming the rising price of oil on the falling value of the dollar requires quite a leap of imagination,” Mr. Hamilton remarks.

Felix Salmon of Market Movers (portfolio.com/views/blogs/market-movers) puts it emphatically: “Repeat after me: The fact that oil prices are denominated in dollars means … absolutely nothing.”

FRANTIC SPENDING MAY SLOW

Although holiday sales for Black Friday rose an encouraging 8.3% versus last year, researchers at National Retail Federation predicted in a statement on Sunday that sales growth for the entire 2007 holiday season would be just 4% — the smallest rise in six years.

The senior vice president and chief economist of Chicago-based Grubb & Ellis, Robert Bach, said strong Black Friday sales don’t necessarily indicate an optimistic consumer. “It really is only one day,” he said, “I think stores have been going out of their way to lower prices and offer bargains this year.” Broader economic uncertainty, he says, will likely cause buyers to tighten purse strings.

According to Mr. Bach, retailers are more anxious this year. Although traffic was high during the days following Thanksgiving, the average shopper spent less than in years past, he said, and Internet sales are taking business from brick-and-mortar retailers.

A nationwide survey conducted by AOL Shopping and Zogby International found that 74% of respondents plan to do at least some holiday shopping online. According to the poll, many tight-budgeted shoppers think that the best deals can be found online.

Still, Mr. Bach is optimistic, saying he thought the figures were “encouraging, given the steady drumbeat of negative news lately.” Although Mr. Bach predicts lower sales growth for this year’s holiday season, he thinks recently released figures indicate that retailers will be able to continue carrying their weight in the national economy.

To see more insights from the country’s leading economics blogs, go to nysun.com/blogs.