The response of world energy and oil demand to income growth and changes in oil prices

Book · Wed Nov 01 04:00:00 EST 1995

OSTI ID:118621

Dargay, J ^[1]; Gately, D ^[2]

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1. Oxford Univ. (United Kingdom). Transport Studies Unit
2. New York Univ., NY (United States). Economics Dept.

This paper reviews the path of world oil demand over the past three decades, and the effects of both the oil price increases of the 1970s and the oil price decreases of the 1980s. Compared with demand in the industrialized countries, demand in the Less Developed Countries (LDC) has been more responsive to income growth, less responsive to price increases, and more responsive to price decreases. The LDC has also exhibited much greater heterogeneity in income growth and is effect on demand. The authors expect a smaller demand response to future price increases than to those of the 1970s. The demand response to future income growth will be not substantially smaller than in the past. Finally, given the prospect of growing dependence on OPEC oil, in the event of a major disruption the lessened price-responsiveness of demand could cause dramatic price increases and serious macroeconomic effects.

• OSTI ID: 118621
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
DATA
DEMAND FACTORS
ECONOMIC DEVELOPMENT
ENERGY DEMAND
GLOBAL ASPECTS
PETROLEUM
PRICES