International transmission of oil price effects and the derivation of optimal oil prices
The purpose of this dissertation is to study the international transmission of oil-price effects and the derivation of optimal oil prices not as two separate problems but rather as one problem by recognizing that changes in oil prices affect real income of oil importers and thus feed back to the demand for oil faced by OPEC. To study the international transmission of oil price changes, the author develops a three-region world model where real income, prices, and international trade are endogenously determined. With this model he derives the comparative statics of oil price changes. He also analyzes the feedback effect of oil price changes, allowing for counterinflationary policies in oil-importing countries. A modified version of the theoretical model is econometrically estimated with data for 1960-1979. The quantitative dimension of oil price changes using dynamic multipliers is studied. Also studied are the impacts of restrictive fiscal policy in DC's, greater absorption by OPEC, and increased financial transfers to LDC's on real income, in the international oil market, on inflation, and on international trade of manufacturers and raw materials. It was found that not recognizing the feedback effects of oil price increases introduces a significant upward bias in the total price elasticity and in the optimal oil price path, neither of which is consistent with OPEC's best interest.
- OSTI ID:
- 5358772
- Country of Publication:
- United States
- Language:
- English
Similar Records
OPEC's pricing policy and the international transmission of oil price effects
Proposed currency composite approach to pricing OPEC oil: problems and possibilities
Related Subjects
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002 -- Energy Planning & Policy-- Petroleum
DEMAND FACTORS
ECONOMIC ELASTICITY
ECONOMIC IMPACT
ENERGY SOURCES
FOSSIL FUELS
FUELS
GLOBAL ASPECTS
INTERNATIONAL ORGANIZATIONS
OIL-EXPORTING COUNTRIES
OIL-IMPORTING COUNTRIES
OPEC
OPTIMIZATION
PETROLEUM
PRICES