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The Effect of Changes in World Crude Oil Prices on U.S. Automobile Exports

Author

Listed:
  • Maksim Belenkiy

    (Economist, International Trade Administration, U.S. Department of Commerce, Washington DC, USA)

  • Stefan Osborne

    (Economist, International Trade Administration, U.S. Department of Commerce, Washington DC, USA)

Abstract

This study describes an export model where consumers differentiate between different types of automobiles by the distance they can travel on one dollar’s worth of fuel. The model predicts that the overall demand for vehicles falls as crude oil prices rise, and that the demand for less fuelefficient vehicles falls relatively more. In particular, we estimate that between 2007 and 2008, when the crude oil prices increased by 32 percent, the export demand for the SUVs manufactured in the United States declined by over $700 million. This implies that the relatively less fuel-efficient U.S.- model vehicles will tend to suffer a competitive disadvantage worldwide when crude oil prices are high. We discuss the potential role of the proposed CAFÉ standards in improving fuel-efficiency and growing exports of the U.S. vehicle fleet.

Suggested Citation

  • Maksim Belenkiy & Stefan Osborne, 2012. "The Effect of Changes in World Crude Oil Prices on U.S. Automobile Exports," International Journal of Energy Economics and Policy, Econjournals, vol. 2(3), pages 147-158.
  • Handle: RePEc:eco:journ2:2012-03-7
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Nnaemeka Vincent Emodi & Kyung-Jin Boo, 2015. "Sustainable Energy Development in Nigeria: Overcoming Energy Poverty," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 580-597.
    2. Laura Cueppers & Dieter Smeets, 2015. "How Do Oil Price Changes Affect German Stock Returns?," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 321-334.

    More about this item

    Keywords

    Fuel efficiency; CAFÉ standards; International trade; Econometrics;

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • F1 - International Economics - - Trade
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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