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Can oil reach $200 a barrel?

Author

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  • David BONNER

    (University of Exeter)

Abstract

Oil is a natural exhaustible resource, affected by depletion. It is one of the most important factors of production, but because is not a storable good, it can only obtain value by production and consumption (Elekdag et. al., 2008). This essay will first discuss the facts that would lead to a rise in the oil price to $200 a barrel by 2009 and then look at the impact of this rise, considering it is maintained for further 5 years. The ASPS, one of the most common indexes for oil, has risen by 70,1% from January 2007 to January 2008 (IMF Primary Commodity Prices). In view of this, this scenario is a very likely to take place in the next period. This essay is concentrating on the effects this increase would have on growth, inflation and unemployment în both non-oil and oil producing countries, using a basic analysis of aggregate demand - aggregate supply.

Suggested Citation

  • David BONNER, 2008. "Can oil reach $200 a barrel?," Finante - provocarile viitorului (Finance - Challenges of the Future), University of Craiova, Faculty of Economics and Business Administration, vol. 1(8), pages 132-137, December.
  • Handle: RePEc:aio:fpvfcf:v:1:y:2008:i:8:p:132-137
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    More about this item

    Keywords

    oil price; monetary policy; Philips curve;

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates

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