 Oil Prices and the Global EconomyRabah Arezki, Zoltán Jakab, Douglas Laxton, Akito Matsumoto, Armen Nurbekyan, Hou Wang and Jiaxiong Yao No 2017/015, IMF Working Papers from International Monetary Fund Abstract: This paper presents a simple macroeconomic model of the oil market. The model incorporates features of oil supply such as depletion, endogenous oil exploration and extraction, as well as features of oil demand such as the secular increase in demand from emerging-market economies, usage efficiency, and endogenous demand responses. The model provides, inter alia, a useful analytical framework to explore the effects of: a change in world GDP growth; a change in the efficiency of oil usage; and a change in the supply of oil. Notwithstanding that shale oil production today is more responsive to prices than conventional oil, our analysis suggests that an era of prolonged low oil prices is likely to be followed by a period where oil prices overshoot their long-term upward trend. Keywords: WP; oil price; demand and supply; price incentive; supply shock; Oil market; macroeconomic model; depletion; consumption efficiency; technology; cycle; demand and supply price elasticity; oil supply; supply curve; price of oil; Oil prices; Oil; Oil production; Natural gas sector; Supply elasticity; Global (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/015 Ordering information: This working paper can be ordered from Access Statistics for this paper More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC. |
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