Structural Differences and Macroeconomic Adjustment to Oil Price Increases in a Three-Country Model
In this paper a three-country model based on intertemporal maximizing behavior is constructed in order to analyze the effects of oil price increases on welfare levels and trade balance positions. The model can also be used to assess the effects of oil price increases on the world interest rate, on the final goods terms of trade between oil importers (what is sometimes called the real exchange rate), and on output, investment and savings levels, oil imports, wages, and consumption at each date. The analysis highlights the role of structural asymmetries between oil importers in accounting for differences in trade balance responses. A number of structural differences are isolated in turn in order to determine their influence on the final goods terms of trade, which is the key factor in affecting relative trade balance positions.
|Date of creation:||Jan 1982|
|Date of revision:|
|Publication status:||published as Marion, Nancy Peregrim and Lars E. O. Svensson."The Terms of Trade Between Oil Importers," Journal of International Economics, Vol. 20, pp. 99-113, Feb. 1986. IIES Seminar Paper No. 248.|
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- Bruno, M., 1973. "Protection and tariff change under general equilibrium," Journal of International Economics, Elsevier, vol. 3(3), pages 205-225, August.
- Nancy Peregrim Marion, 1981. "Anticipated and Unanticipated Oil Price Increases and the Current Account," NBER Working Papers 0759, National Bureau of Economic Research, Inc.
- Svensson, Lars E O & Razin, Assaf, 1983. "The Terms of Trade and the Current Account: The Harberger-Laursen-Metzler Effect," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 97-125, February.
- Maurice Obstfeld, 1980.
"Intermediate Imports, the Terms of Trade, and the Dynamics of the Exchange Rate and Current Account,"
NBER Working Papers
0540, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice, 1980. "Intermediate imports, the terms of trade, and the dynamics of the exchange rate and current account," Journal of International Economics, Elsevier, vol. 10(4), pages 461-480, November.
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