The Effect of Changes in World Crude Oil Prices on U.S. Automobile Exports

Maksim Belenkiy and Stefan Osborne
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Maksim Belenkiy: Economist, International Trade Administration, U.S. Department of Commerce, Washington DC, USA
Stefan Osborne: Economist, International Trade Administration, U.S. Department of Commerce, Washington DC, USA

International Journal of Energy Economics and Policy, 2012, vol. 2, issue 3, 147-158

Abstract: This study describes an export model where consumers differentiate between different types of automobiles by the distance they can travel on one dollar s worth of fuel. The model predicts that the overall demand for vehicles falls as crude oil prices rise, and that the demand for less fuelefficient vehicles falls relatively more. In particular, we estimate that between 2007 and 2008, when the crude oil prices increased by 32 percent, the export demand for the SUVs manufactured in the United States declined by over $700 million. This implies that the relatively less fuel-efficient U.S.- model vehicles will tend to suffer a competitive disadvantage worldwide when crude oil prices are high. We discuss the potential role of the proposed CAF standards in improving fuel-efficiency and growing exports of the U.S. vehicle fleet.

Keywords: Fuel efficiency; CAF standards; International trade; Econometrics (search for similar items in EconPapers)
JEL-codes: C1 F1 Q4 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2012-03-7

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