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U.S. Department of Energy
Office of Scientific and Technical Information

Real exchange-rate adjustment and the welfare effects of oil-price decontrol. [Monograph]

Book ·
OSTI ID:5714320

Conventional analysis of the welfare effects of US oil price regulation in the 1970s focuses on the deadweight losses in the oil market. This paper argues that such analysis substantially underrates the benefits from decontrolling prices because decontrol will lead to an improvement in the US terms of trade with respect to other oil-importing countries. A simple model of the relationship between oil decontrol and the terms of trade is developed, and the impact is calculated for plausible parameter values. The results suggest that the terms of trade benefits are several times larger than the benefits as conventionally measured. 4 references, 1 figure, 5 tables.

OSTI ID:
5714320
Country of Publication:
United States
Language:
English