IDEAS home Printed from https://ideas.repec.org/p/eab/energy/22722.html

How does a decrease in oil production affect the world's economy?

Author

Listed:
  • Naohiko Yahaba

    (Asia-Japan Research Centre)

Abstract

The world's oil consumption has been increasing for more than a century with a few exceptions. However, there would be a possibility that the recent increase in oil consumption in developing countries such as China and India tighten the long term oil market. Since the exact amount of oil reserves is unknown, it is difficult to predict when the ultimate decrease in oil production will come. However, for the last two decades, the amount of oil consumption per year has surpassed the amount of oil reserves newly found. Therefore, the possibility of ultimate decrease in oil production may increase. This paper examines the impact of the decrease in oil production on major economies using a computable general equilibrium model. Under the simulations in this paper, the oil exporting economies increase their GDPs, the utilities and the terms of trade. The oil importing regions, especially in newly industrialised and developing regions, decrease their GDPs, utilities and the terms of trade. All industry sectors decrease their world output. Among industry sectors, oil industry affects most and the industry sectors which use large amount of oil such as petroleum industry and chemical industry decrease its outputs significantly.

Suggested Citation

  • Naohiko Yahaba, 2010. "How does a decrease in oil production affect the world's economy?," Energy Working Papers 22722, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:energy:22722
    as

    Download full text from publisher

    File URL: http://www.eaber.org/node/22722
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    2. McDougall, Robert, 2000. "A New Regional Household Demand System for GTAP," GTAP Working Papers 404, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    3. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naohiko Yahaba, 2010. "How Does A Decrease In Oil Production Affect The World Economy?," Asia Pacific Economic Papers 388, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    2. Baldassarre,Alessio & Calà,Valerio Ferdinando & Carullo,Danilo & Dudu,Hasan & Fusco,Elisa Marie & Giacobbe,Pasquale & Orecchia,Carlo, 2023. "Simulating the Effect of Business Tax Abolition through a New Regional CGE Model : Evidencefrom Italy," Policy Research Working Paper Series 10387, The World Bank.
    3. Martin, Will, 2021. "Tools for measuring the full impacts of agricultural interventions," IFPRI-MCC technical papers 2, International Food Policy Research Institute (IFPRI).
    4. Mutambatsere, Emelly, 2006. "Trade Policy Reforms in the Cereals Sector of the SADC Region: Implications on Food Security," Working Papers 127055, Cornell University, Department of Applied Economics and Management.
    5. Xiao-guang Zhang & George Verikios, 2006. "Providing Duty-Free Access to Australian Markets for Least-Developed COuntries: a General Equilibrium Analysis," Economics Discussion / Working Papers 06-09, The University of Western Australia, Department of Economics.
    6. Hertel, Thomas & Hummels, David & Ivanic, Maros & Keeney, Roman, 2007. "How confident can we be of CGE-based assessments of Free Trade Agreements?," Economic Modelling, Elsevier, vol. 24(4), pages 611-635, July.
    7. Fan Zhai, 2008. "Armington Meets Melitz: Introducing Firm Heterogeneity in a Global CGE Model of Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 575-604.
    8. Roland-Holst, David & Mensbrugghe, Dominique van der & Tarp, Finn & Rand, John & Barslund, Mikkel, 2002. "Prototype Specification for a Real Computable General Equilibrium Model," MPRA Paper 29788, University Library of Munich, Germany.
    9. Padella, Monica & Finco, Adele & Tyner, Wallace E., 2011. "Analysis of the Impacts of EU Biofuels Programs using a GTAP model," Conference papers 332124, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Clements, Kenneth W. & Vo, Long Hai & Mariano, Marc Jim, 2021. "Modelling import penetration," Economic Modelling, Elsevier, vol. 102(C).
    11. Lewis, Jeffrey D. & Robinson, Sherman & Thierfelder, Karen, 1999. "After the negotiations: assessing the impact of free trade agreements in Southern Africa," TMD Discussion Papers 97532, CGIAR, International Food Policy Research Institute (IFPRI).
    12. Johannes Ziesmer & Ding Jin & Sneha D Thube & Christian Henning, 2023. "A Dynamic Baseline Calibration Procedure for CGE models," Computational Economics, Springer;Society for Computational Economics, vol. 61(4), pages 1331-1368, April.
    13. Ken Itakura, 2011. "The Economic Consequences of Shifting Away From Nuclear Energy," Working Papers PB-2011-04, Economic Research Institute for ASEAN and East Asia (ERIA).
    14. Narayana, Badri G. & Hertel, Thomas W. & Horridge, J. Mark, 2010. "Linking Partial and General Equilibrium Models: A GTAP Application Using TASTE," Technical Papers 283427, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Francois, Joseph & Manchin, Miriam & Norberg, Hanna, 2010. "Distribution services and differential producer and consumer price impacts of trade," Conference papers 331942, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    16. Jean‐Christophe Bureau & Luca Salvatici, 2005. "Agricultural trade restrictiveness in the European Union and the United States," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 479-490, November.
    17. Carrico, Caitlyn & Tsigas, Marinos, 2014. "Enriching U.S. labor results in a multi-regional CGE model," Economic Modelling, Elsevier, vol. 36(C), pages 268-281.
    18. Lips, Markus, 2005. "Sufficient nourishment worldwide via transfer payments," Food Policy, Elsevier, vol. 30(1), pages 81-96, February.
    19. Jie He & David Roland-Holst, 2010. "Economic Growth, Energy demand and Atmospheric Pollution: Challenges and Opportunities for China in the future 30 years," Cahiers de recherche 10-11, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    20. Eromenko, Igor, 2010. "Accession to the WTO. Computable General Equilibrium Analysis: the Case of Ukraine. Part I," MPRA Paper 67476, University Library of Munich, Germany.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eab:energy:22722. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Shiro Armstrong (email available below). General contact details of provider: https://edirc.repec.org/data/eaberau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.