An Oil and Gas Model
AbstractThis 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. Estimates showed that short-run demand for oil and gas was price- inelastic, relatively income-elastic, and 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, and could confer to producers a temporary market power. 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.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 07/135.
Date of creation: 01 Jun 2007
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-06-23 (All new papers)
- NEP-ENE-2007-06-23 (Energy Economics)
- NEP-FOR-2007-06-23 (Forecasting)
- NEP-MAC-2007-06-23 (Macroeconomics)
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- Noureddine Krichene, 2008. "Crude Oil Prices: Trends and Forecast," IMF Working Papers 08/133, International Monetary Fund.
- Chevillon, Guillaume & Rifflart, Christine, 2009.
"Physical market determinants of the price of crude oil and the market premium,"
Elsevier, vol. 31(4), pages 537-549, July.
- Chevillon, Guillaume & Rifflart, Christine, 2007. "Physical Market Determinants of the Price of Crude Oil and the Market Premium," ESSEC Working Papers DR 07020, ESSEC Research Center, ESSEC Business School.
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