Adjustment to higher oil prices in oil-importing developing countries
The adjustments made by the oil-importing developing countries to the oil price increases of 1973 to 1974 are analyzed to see if the lessons learned can be applied to the latest price rises. The short-term effects of deteriorating trade balances and inflation, unless other imports are reduced, require internal adjustments to control and stimulate the economy and long-term adjustments to control the transfer of resources. Focusing on the short-run adjustments, the trade deficits resulted in increased exports and foreign debt, which were handled without major disruptions in selected countries and with increased borrowing by others. Factors which minimize the damage of retarded economic growth are the facts that oil imports to developing countries are small relative to output and foreign exchange reserves are high. The problem of financing current deficits will require close international cooperation and open markets. 5 references, 6 tables. (DCK)
- Research Organization:
- Resources for the Future, Inc., Washington, DC
- OSTI ID:
- 5035799
- Journal Information:
- J. Energy Dev.; (United States), Vol. 5:2
- Country of Publication:
- United States
- Language:
- English
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