An Oil and Gas Model
IMF Working Papers, June 1, 2007
Source details
- Canonical URL
- An Oil and Gas Model
Other formats
Bibliographic details
- Authors: Noureddine Krichene
- Published: June 1, 2007
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451866995.001
Summary
- This paper formulated a short-run model, with an explicit role for monetary policy, for analyzing world oil and gas markets.
- The model described carefully the parameters of these markets and their vulnerability to business cycles.
- Being simultaneous and incorporating interest and exchange rates, the model could be useful in short-term forecasting of oil and gas outputs and prices under policy scenarios.
- Author: Noureddine Krichene
- Date: June 1, 2007
Key empirical findings and model estimates
- Short-run demand for oil and gas was price-inelastic.
- Short-run demand for oil and gas was relatively income-elastic.
- Short-run demand was influenced by interest and exchange rates.
- Short-run supply was price-inelastic.
- Short-run price inelasticity could be a source for high volatility in oil and gas prices.
- Short-run price inelasticity could confer to producers a temporary market power.
Model features and analytical uses
- The model is short-run and simultaneous.
- It includes an explicit role for monetary policy.
- It incorporates interest rates and exchange rates as influences on demand.
- Potential use: short-term forecasting of oil and gas outputs and prices under policy scenarios.
Subject headings and keywords
- Subject: Fuel prices, Natural gas sector, Oil, Oil prices, Price elasticity
- Keywords: demand price, demand shock, WP
Content in this bundle
- An Oil and Gas Model; Noureddine Krichene; IMF Working Paper 07/135; June 1, 2007