Haberler's ''Oil, inflation, recession, and the international monetary system''

Journal Article · · J. Energy Dev.; (United States)

OSTI ID:7317930

Pollack, G A

Dr. Haberler's position (J. Energy Devel. 1: No 2 (Spr. 1976); EAPA 2: 1694) that international oil deficits should be handled the same as other deficits varies with the conventional view that oil-importing nations should finance their oil deficits and adjust to eliminate nonoil deficits; both views agree that the Organization of Petroleum Exporting Countries (OPEC) must use its revenues to buy from or invest in the importing countries. Those who hold the conventional view oppose exchange-rate adjustments for oil because the drain on consumer funds for other goods is only partially made up by increased spending by OPEC. The magnitude of the petroleum market does not permit spontaneous equilibrium and has led to the financing of these deficits in order to maintain employment and monetary stability. There is no clear evidence that exchange-rate fluctuations couldn't handle oil deficits if recent experiences of Japan and Europe are examined, but it is apparent that these countries preferred to finance both oil and nonoil deficits rather than allow drastic fluctuations. Evidence also indicates that countries preferred financing to protectionist responses of shifting the burden to others by devaluing currency. The reviewer finds Dr. Haberler's pessimistic view of domestic inflation to be extreme and his evaluation of the recessionary impact of higher oil import prices to be too mild. (DCK)

• OSTI ID: 7317930
• Journal Information: J. Energy Dev.; (United States), Journal Name: J. Energy Dev.; (United States) Vol. 2:1; ISSN JENDD
• Country of Publication: United States
• Language: English

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