Oil Prices and the Global Economy
IMF Working Papers, January 27, 2017
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- Oil Prices and the Global Economy
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Bibliographic details
- Authors: Rabah Arezki, Zoltan Jakab, Douglas Laxton, Akito Matsumoto, Armen Nurbekyan, Hou Wang, Jiaxiong Yao
- Published: January 27, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475572360.001
Authors and publication
- Authors: Rabah Arezki, Zoltan Jakab, Douglas Laxton, Akito Matsumoto, Armen Nurbekyan, Hou Wang, Jiaxiong Yao
- Publication date: January 27, 2017
- Series: Working Paper No. 2017/015
- Issue: 015
- Volume: 2017
- Pages: 30
- DOI: https://doi.org/10.5089/9781475572360.001
- Stock No: WPIEA2017015
- ISBN: 9781475572360
- ISSN: 1018-5941
- Preview citation (as provided): Rabah Arezki, Zoltan Jakab, Douglas Laxton, Akito Matsumoto, Armen Nurbekyan, Hou Wang, and Jiaxiong Yao. "Oil Prices and the Global Economy", IMF Working Papers 2017, 015 (2017), accessed 9/18/2026, https://doi.org/10.5089/9781475572360.001
Model structure and key mechanisms
- The paper presents a simple macroeconomic model of the oil market that incorporates:
- Supply-side features: depletion, endogenous oil exploration and extraction.
- Demand-side features: secular increase in demand from emerging-market economies, usage efficiency, and endogenous demand responses.
- The model is used as an analytical framework to explore effects of:
- a change in world GDP growth;
- a change in the efficiency of oil usage;
- a change in the supply of oil.
Principal findings and implications
- Notwithstanding that shale oil production today is more responsive to prices than conventional oil, the analysis suggests:
- an era of prolonged low oil prices is likely to be followed by a period where oil prices overshoot their long-term upward trend.
- The model provides inter alia a useful analytical framework to explore demand and supply dynamics, including price incentive effects and supply elasticity.
Subject classification and keywords
- Subject: Commodities; Economic sectors; Economic theory; Natural gas sector; Oil; Oil prices; Oil production; Prices; Production; Supply elasticity
- Keywords: consumption efficiency; cycle; demand and supply; demand and supply price elasticity; depletion; Global; macroeconomic model; Natural gas sector; Oil; Oil market; oil price; Oil prices; Oil production; oil supply; price incentive; price of oil; supply curve; Supply elasticity; supply shock; technology; WP
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Source: IMF Working Papers — "Oil Prices and the Global Economy" (Working Paper No. 2017/015), January 27, 2017.
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- Oil Prices and the Global Economy