Last week saw a significant reduction in global warming in Beijing. No, not the agreement to reduce carbon emissions reached by President Barack Obama and Chinese President Xi Jinping. Rather, it was the icy interchanges between the world’s leaders gathered in China’s capital for the Asia-Pacific Economic Cooperation conference that seemed to induce a virtual polar vortex over the proceedings. Even the warm gesture of draping a shawl over the shoulders of China’s first lady by Russian President Vladimir Putin was coolly received, as he was seen as being a bit too hot to trot for this venue, which was far more chilly than chill.

While critics contend that the environmental pact will do more to restrain U.S. economic growth than Chinese carbon emissions and global warming, an unmistakable deflationary cold front has been spreading across global markets. The blast from the slide in commodities is being felt across other sectors, in currencies, credit, and equity markets.

According to the conventional wisdom, this ought to be the most salubrious of situations. To use the cliché, the drop in prices at the gasoline pump translates into a tax cut for the consumer. (The identity of this single, solitary consumer is a closely guarded secret, although pundits apparently have access to his or her mind-set and motivations.) In a piece emblazoned with the headline “THE BARREL STIMULUS,” in all caps, in case you might have missed it, last Friday’s New York Times quotes a corporate chieftain who declares “if oil prices stay between $75 and $95 a barrel, we would see the kind of stimulus package that the Federal Reserve or Congress could never do.”

This, however, ignores the revolution in domestic oil production that has been loudly trumpeted as making the U.S. energy independent, a hyperbolic claim to be sure. But U.S. crude-oil production has ramped past nine million barrels a day, a pace not seen in decades, a result of advances in technology, such as hydraulic fracturing, combined with the massive capital that has been pumped into the sector.

This shift at the margin from America being mainly a consumer to a producer of oil has been a plus for the U.S. economy. So, at the minimum, the reduction of this plus is a minus for this sector, notwithstanding the windfall for consumers—a point made previously in this column in the past month, both in the print (“Down an Oily Slope,” Oct. 13) and online editions (“Watch Out for Falling Oil,” Oct. 15).

In her latest MacroMavens missive, Stephanie Pomboy cites a report from the Manhattan Institute stating that “without the $300 to $400 billion yearly increase in output from oil and gas production, [economic] growth would still be negative.” Since U.S. oil production started to surge in 2012, the longstanding inverse relationship between the economy and crude prices has shifted, she points out with her usual perspicacity.

“Lower oil prices are now a net negative,” she continues. The New Normal is that “the hit to domestic energy producers is greater than the benefit of lower prices to energy consumers.” That also is the conclusion of an analysis from a major institutional investor group (whose name dare not be divulged in print). Putting pencil to paper, or more likely keyboard to spreadsheet, the group reckons that the drop in prices at the pump initially will boost real U.S. economic growth by 0.25%. Without further declines, however, that boost will fade.

Lower oil prices will then exert a larger, more sustained drag on the economy as they flow through to the energy sector. Some 30% of U.S. shale-oil production is noneconomic at current prices, the group calculates. And, unlike traditional oil production, shale plays require a continual, high level of investment to maintain output. The reduction of this spending could be a drag of 0.5% on real gross domestic product growth—twice the benefit to consumers.

In nominal terms, the drop in oil prices makes this more acute. This group estimates that there would be a “material hit to income growth of 1% to 1.5%” measured in current dollars. And current dollars are what many of these highly leveraged oil producers need to service their substantial debt. As our colleague Michael Aneiro describes in this week’s Current Yield column, the high-yield bond market is heavily populated by energy companies, which availed themselves of copious credit to fund the expansion that has produced the sector’s growth.

EVEN IN THE U.S. STOCK MARKET, the drop in oil prices has been felt. Microsoft (ticker: MSFT) on Thursday overtook ExxonMobil (XOM) as the second-largest company in terms of market capitalization. (They both are, of course, behind Apple (AAPL) at the top of the leader board, where it extended its steady ascent with 1% daily rises in the last three sessions of the week.) And to cope with lower prices, Halliburton (HAL) is reported to be seeking to buy rival Baker Hughes (BHI.)

Those two big oil-services players didn’t wait for the International Energy Agency to release its report contending that oil—on Thursday, U.S. benchmark crude fell below $75, to a four-year low—could keep sliding into the first half of 2015. “It is increasingly clear we have begun a new chapter in the history of the oil markets,” the IEA said.

That also is apparent to Putin, who said on Friday that Russia is preparing for a “catastrophic” drop in oil prices. Venezuela also is reeling from the slump in petro revenue, while producers of other energy commodities around the globe also are feeling the pinch. Glencore (GLEN.UK) will temporarily shut its Australian mines for three weeks to cope with a market that is “awash with coal,” The Wall Street Journal reports.

The surfeit of coal and oil are a result of the investment booms in recent years to meet what was thought to be insatiable demand for energy, especially from China. Ultralow interest rates engineered by central banks helped provide cheap capital to fund projects. And, as the old saying in the commodity pits goes, the cure for high prices is high prices; they eventually spur increased supply to meet demand, sometimes too successfully.

Combined with the effect from the rising dollar, these falling prices, especially for fuels, are evidencing themselves in a sharp drop in import prices—down some 1.3% in October, the Labor Department reported on Friday. It cuts both ways, however; prices of U.S. exports dropped 1% last month.

While cheaper fuel might be a windfall for consumers, they don’t seem to be heading to the mall to spend it. Overall retail sales rose 0.3% last month, reversing September’s similarly sized decline. But Steve Blitz, chief economist of ITG Investment Research, notes that department-store sales fell 0.3% last month after plunging 1.1% in September. He argues that, while higher fuel prices pinch discretionary spending, lower ones allow consumers to spend in tandem with incomes, which slog along at a 2% growth rate. More to the point, says Pomboy, “bubble-scarred U.S. consumers are taking any unexpected windfall as an opportunity to save.”

Globally, the main coping mechanism is the currency market. Countries cut prices by lowering exchange rates to maintain market share. That is a zero-sum game in which any gains are at the cost of others, and probably ephemeral at that.

It’s a game of monetary musical chairs, too. As the Japanese yen continues to slide, hitting a multiyear low last week of more than 116 yen to the dollar, the Korean won remains under pressure as Hyundai (005380.Korea) struggles to compete with Japanese auto makers, such as Toyota (TM) and Honda (HMC.) Countries in the rest of Asia and in Latin America have seen their currencies slump to keep pace in globally competitive marketplaces.

Meanwhile, China’s renminbi has appreciated even more than the dollar, a hindrance to that export-dependent economy, especially relative to Japan. With no love lost between those geopolitical rivals, could the exchange-rate shift between their currencies have contributed to pinched expressions between China’s Xi and Japanese Prime Minister Shinzo Abe at the APEC conference?

While the slide in pump prices didn’t bolster spending at department stores, it did boost consumer confidence, the University of Michigan reported on Friday. In particular, inflation expectations downshifted materially last month. That is especially important to Federal Reserve officials, who pay closer attention to such surveys than to market-based indicators, such as Treasury Inflation Protected Securities, according to JPMorgan’s chief domestic economist, Michael Feroli.

Indeed, according to the institutional investor’s research cited earlier, the key effect of low energy prices might be to stave off eventual Fed rate hikes, which the federal-funds futures market sees happening by the Sept. 17, 2015, meeting of the Federal Open Market Committee, according to the Website of the Chicago Mercantile Exchange. (However, the description of probabilities of Fed rate hikes cited here last week was incorrect, owing to a technical snafu at the CME.)

In sum, watch out for falling oil prices. Consumers initially may feel pleasure when it costs less to fill their gas tanks. But all those who have benefited from the U.S. oil boom, from producers to suppliers to oil workers earning a healthy paycheck, may be worrying, and eventually may be hurting.