Understanding Oil Cycle Dynamics to Design the Future Economy

Luis Enrique Garcia, Aude Illig and Ian Schindler ()
Additional contact information
Luis Enrique Garcia: ESE, IPN
Aude Illig: University of Toulouse 1, Capitole
Ian Schindler: CNRS UMR 5219, University of Toulouse 1, Capitole

Biophysical Economics and Resource Quality, 2020, vol. 5, issue 4, 1-17

Abstract: Abstract In this work, we make the ansatz that economic production is reduced to the energy made available to the economy. In (Illig and Schindler, BioPhys Econ Resour Qual 2(1):1, 2017) the price of oil was expressed as a function of the size of the economy, the cost share of oil, and the quantity of oil extracted. We clarify assumptions needed to use this explicit price equation to study prices. Using the current extraction rate, the previous year’s extraction rate, and interest rates of the Federal Reserve we use linear regression to give a model for oil prices from 1966 to 2018. The model verifies that deductions made from the explicit price equation are consistent with empirical data over the given time period. Our analysis indicates that the contraction phase of world oil extraction began in 2020 and that it will be characterized by relatively low oil prices. We present some challenges and opportunities for building a future economy if our assumptions prove valid.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s41247-020-00081-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:bioerq:v:5:y:2020:i:4:d:10.1007_s41247-020-00081-4

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41247

DOI: 10.1007/s41247-020-00081-4

Access Statistics for this article

Biophysical Economics and Resource Quality is currently edited by C.A.S. Hall and U. Bardi

More articles in Biophysical Economics and Resource Quality from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().