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Author/Editor:
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Kumhof, Michael ; Muir, Dirk
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Publication Date:
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October 25, 2012
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Electronic Access:
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Free Full text
(PDF file size is 820KB).
Use the free
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.
The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
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Summary:
This paper, using a six-region DSGE model of the world economy, assesses the GDP and current account implications of permanent oil supply shocks hitting the world economy at an unspecified future date. For modest-sized shocks and conventional production technologies the effects are modest. But for larger shocks, for elasticities of substitution that decline as oil usage is reduced to a minimum, and for production functions in which oil acts as a critical enabler of technologies, GDP growth could drop significantly. Also, oil prices could become so high that smooth adjustment, as assumed in the model, may become very difficult.
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Order a print copy
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Series:
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Working Paper No. 12/256
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Subject(s):
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Oil production | Demand | Supply | Oil prices | External shocks | Price elasticity | Economic models
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English
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Publication Date:
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October 25, 2012
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ISBN/ISSN:
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9781475586640/2227-8885
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Format:
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Paper
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Stock No:
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WPIEA2012256
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Pages:
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31
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Price:
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US$18.00 )
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Please address any questions about this title to
publications@imf.org
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