Oil price and organizational asymmetries in a North-South-OPEC context

Arturo González Romero
Additional contact information
Arturo González Romero: Facultad de CC. Económicas y Empresariales. Universidad Complutense de Madrid.

No 88-04, Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

Abstract: The object of this paper is to highlight the contribution that a dual economy in the South as organizational asimmetry makes to the oil price rise process and its effects on welfare, first, when the North is Neoclassical, secondly, when the North behaves a la Taylor. The model shows that when the oil price rises, despite the improvement of the Southern terms of trade vis-a-vis the North, welfare in the South may deteriorate due to a decline in the levels of output and employment in the modern-advanced sector. When the North is Neoclassical, employment in the modern sector unambiguously falls. In the "structuralist" perspective, when the North is Neokeynesian, the South's level of employment in the modern sector will fall whenever OPEC's marginal propensity to import is sufficiently low. Whereas in the first framework, the oil intensiveness of Southern output is critical to the results, in the second the critical parameter is OPEC's recycling coefficient. In general, the analysis increases our understanding of why region respond differently to the same external shock and how from different organizational asimmetries we should derive alternative policy implications. With the current fall in oil prices, the topic promises to be relevant for some time, although the direction of the shocks has been reversed.

Keywords: Oil price; North-South; OPEC. (search for similar items in EconPapers)
Pages: 32 pages
Date: 1988
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eprints.ucm.es/id/eprint/23118/1/8804.pdf (application/pdf)

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:ucm:doctra:88-04

Ordering information: This working paper can be ordered from
Facultad de Ciencias Económicas y Empresariales. Campus de Somosaguas, 28223 - POZUELO DE ALARCÓN (MADRID)
https://economicasye ... /working-papers-ccee

Access Statistics for this paper

More papers in Documentos de trabajo de la Facultad de Ciencias Económicas y Empresariales from Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales Contact information at EDIRC.
Bibliographic data for series maintained by Águeda González Abad ().