Russian Abstract: Целью данной работы является разработка модели рынка нефти Российской Федерации, которая позволит получить качественные и количественные результаты, в результате проведения моделирования различных шоков, возникающих на нефтяном рынке, и позволит более взвешенно подходить к принятию решений, направленных на дальнейшее развитие нефтегазового сектора экономики. English Abstract: The purpose of this work is to develop an oil market model of the Russian Federation that will yield qualitative and quantitative results, modeling various shocks arising in the oil market, and will allow a more balanced approach to the adoption of decisions aimed at further development of the oil and gas sector.
{"title":"Разработка Численной Модели Рынка Нефти и Нефтепродуктов Российской Федерации (Development of a Numerical Model of the Russian Oil and Oil Products Market)","authors":"Dmitry Gordeev, A. Kaukin, Yuriy Ponomarev","doi":"10.2139/ssrn.2982329","DOIUrl":"https://doi.org/10.2139/ssrn.2982329","url":null,"abstract":"Russian Abstract: Целью данной работы является разработка модели рынка нефти Российской Федерации, которая позволит получить качественные и количественные результаты, в результате проведения моделирования различных шоков, возникающих на нефтяном рынке, и позволит более взвешенно подходить к принятию решений, направленных на дальнейшее развитие нефтегазового сектора экономики. \u0000 \u0000English Abstract: The purpose of this work is to develop an oil market model of the Russian Federation that will yield qualitative and quantitative results, modeling various shocks arising in the oil market, and will allow a more balanced approach to the adoption of decisions aimed at further development of the oil and gas sector.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"28 4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-06-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130414654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the deregulated fuels market, biofuels and fossil fuels are close competitors and substitutes. Thus, biofuel producers are subject to risks due to volatile crude oil and biofuels feedstock prices. This paper proposes a two-sector fuel market with competing oil refinery and biofuel sectors, calibrated for cases of gasoline/ethanol and diesel/biodiesel. The model suggests that ethanol and biodiesel plants will shut-down approximately 40% and 20% of the time, respectively. The skewness of profits is -0.32, in contrast to the 0.91 of feedstock prices. Several firm-level and policy-level options to manage crude oil price risks for biofuel producers are discussed further.
{"title":"Biofuel Producers in a Deregulated Market","authors":"Hamed Ghoddusi","doi":"10.2139/ssrn.2487836","DOIUrl":"https://doi.org/10.2139/ssrn.2487836","url":null,"abstract":"In the deregulated fuels market, biofuels and fossil fuels are close competitors and substitutes. Thus, biofuel producers are subject to risks due to volatile crude oil and biofuels feedstock prices. This paper proposes a two-sector fuel market with competing oil refinery and biofuel sectors, calibrated for cases of gasoline/ethanol and diesel/biodiesel. The model suggests that ethanol and biodiesel plants will shut-down approximately 40% and 20% of the time, respectively. The skewness of profits is -0.32, in contrast to the 0.91 of feedstock prices. Several firm-level and policy-level options to manage crude oil price risks for biofuel producers are discussed further.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"48 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122792184","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents a simple oil-exporting-country dynamic growth model with investment, consumption, passive military spending, and active military spending. Passive military spending (arms buildup) adds to security, while active military spending (conflict) depletes it, but adds to output and hence civilian capital (as a proxy for geopolitical risk premium in oil prices) in a non-monotonic way (some geopolitical risk is good for an oil exporter, but too much risk is not). It is shown that when the risk premium is sufficiently small, the optimal policy function does not support any positive active military spending at any levels of civilian capital and security. However, with sufficiently high geopolitical risk premium, the model country engages in controlled conflict (positive active military spending) when civilian capital is low. A controlled conflict in the latter case can shift the production function up, allowing the country to boost its consumption and arms buildup. This explains the big increase in the geopolitical risk premium following the Arab Spring, which included, among other disruptions, a military intervention by Saudi Arabia in Bahrain, as well as the smaller geopolitical risk premium following the recent Saudi-led war against the Houthis in Yemen. If oil prices remain low, depleting the civilian capital of Saudi Arabia and other oil-exporters, it may be rational, according to our model, to expect greater military activity, both to deal with geopolitical risks in the region, and to boost oil prices through the geopolitical risk premium.
{"title":"Winter is Coming: Controlled Conflicts and the Oil-Price Geopolitical-Risk Premium","authors":"Mahmoud A. El-Gamal","doi":"10.2139/ssrn.3008756","DOIUrl":"https://doi.org/10.2139/ssrn.3008756","url":null,"abstract":"This paper presents a simple oil-exporting-country dynamic growth model with investment, consumption, passive military spending, and active military spending. Passive military spending (arms buildup) adds to security, while active military spending (conflict) depletes it, but adds to output and hence civilian capital (as a proxy for geopolitical risk premium in oil prices) in a non-monotonic way (some geopolitical risk is good for an oil exporter, but too much risk is not). It is shown that when the risk premium is sufficiently small, the optimal policy function does not support any positive active military spending at any levels of civilian capital and security. However, with sufficiently high geopolitical risk premium, the model country engages in controlled conflict (positive active military spending) when civilian capital is low. A controlled conflict in the latter case can shift the production function up, allowing the country to boost its consumption and arms buildup. This explains the big increase in the geopolitical risk premium following the Arab Spring, which included, among other disruptions, a military intervention by Saudi Arabia in Bahrain, as well as the smaller geopolitical risk premium following the recent Saudi-led war against the Houthis in Yemen. If oil prices remain low, depleting the civilian capital of Saudi Arabia and other oil-exporters, it may be rational, according to our model, to expect greater military activity, both to deal with geopolitical risks in the region, and to boost oil prices through the geopolitical risk premium.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122684080","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
For a decade from 2000 Indonesia underwent a natural resource export boom. Aggregate income rose, but real labor earnings stagnated. Employment rose mainly in low-skill sectors with predominantly informal employment arrangements. In this paper we reveal causal connections from the aggregate phenomenon of Dutch Disease to these labor market outcomes. We first explain broad sectoral trends, then, integrating data from several national surveys, investigate sources of variation in boom-era labor earnings. We use instrumental variables to address issues of endogeneity and selection in earnings equations. After controlling for individual and district features we find that intensity of oil palm production, a key booming resource export, robustly predicts diminished formal employment, and that lower formality, in turn, robustly predicts lower earnings. Our findings establish causal linkages absent from prior studies, and so provide a structural dimension to ongoing debates over persistent poverty, rising inequality, and lack of educational progress in Indonesia.
{"title":"Could a Resource Export Boom Reduce Workers’ Earnings? The Labor Market Channel in Indonesia","authors":"I. Coxhead, Rashesh Shrestha","doi":"10.2139/ssrn.2752045","DOIUrl":"https://doi.org/10.2139/ssrn.2752045","url":null,"abstract":"For a decade from 2000 Indonesia underwent a natural resource export boom. Aggregate income rose, but real labor earnings stagnated. Employment rose mainly in low-skill sectors with predominantly informal employment arrangements. In this paper we reveal causal connections from the aggregate phenomenon of Dutch Disease to these labor market outcomes. We first explain broad sectoral trends, then, integrating data from several national surveys, investigate sources of variation in boom-era labor earnings. We use instrumental variables to address issues of endogeneity and selection in earnings equations. After controlling for individual and district features we find that intensity of oil palm production, a key booming resource export, robustly predicts diminished formal employment, and that lower formality, in turn, robustly predicts lower earnings. Our findings establish causal linkages absent from prior studies, and so provide a structural dimension to ongoing debates over persistent poverty, rising inequality, and lack of educational progress in Indonesia.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128087736","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
John García, Daniel Pérez Jaramillo, Marcela Orrego, J. Castaño
Spanish Abstract: Este paper utilizando el Modelo Casi Ideal de Demanda (AIDS) por medio de ecuaciones aparentemente no relacionadas para la industria de combustibles en el sector transporte en Colombia, analiza las elasticidades precio de la demanda, precio cruzada de la demanda y gasto de la demanda de la Gasolina motor, Diesel y Gas Natural Vehicular (GNV), dada la recomposicion que ha presentado esta industria entre el 2003 y 2012, con el objetivo de determinar si estos combustibles se comportan como sustitutos o complementarios y se trata de bienes necesarios o no. Los principales resultados indican que la elasticidad precio de la demanda de la Gasolina y el Diesel son bienes inelasticos, mientras que el GNV se comporta como un bien elastico. Por su parte, por medio de la elasticidad precio cruzada de la demanda, se encuentra que solo el Diesel y el GNV se comportan como bienes sustitutos, mientras que para el resto de relaciones (Gasolina-Diesel y Gasolina- GNV) se observa un comportamiento de complementariedad. Ademas desde la elasticidad gasto de la demanda se encontro que la Gasolina y el Diesel se comportan como bienes normales, mientras que el GNV resulta ser un bien inferior.English Abstract: This article presents an Almost Ideal Demand System (AIDS) for different types of fuels in Colombia, focusing specifically on the transport industry. Estimates of price, expenditure and cross elasticities are computed using a Seemingly Unrelated Regressions (SUR) model and based on 10 years observations (2003-2012). Results show that diesel and regular gas behave as inelastic goods while natural gas is more elastic. Also, diesel fuels and natural gas seem to behave as substitutes while there’s a complementary relation among the others (regular gas-Diesel; regular fuels-Natural Gas). Regarding the expenditures elasticities, this paper concludes that regular gas and diesel behave as normal goods while natural gas seems be an inferior type of fuel for the transport sector.)
{"title":"Un Modelo Casi Ideal De Demanda De Combustibles Para La Industria De Transporte (An Almost Ideal Demand System For Fuels in the Transport Industry)","authors":"John García, Daniel Pérez Jaramillo, Marcela Orrego, J. Castaño","doi":"10.2139/SSRN.2736535","DOIUrl":"https://doi.org/10.2139/SSRN.2736535","url":null,"abstract":"Spanish Abstract: Este paper utilizando el Modelo Casi Ideal de Demanda (AIDS) por medio de ecuaciones aparentemente no relacionadas para la industria de combustibles en el sector transporte en Colombia, analiza las elasticidades precio de la demanda, precio cruzada de la demanda y gasto de la demanda de la Gasolina motor, Diesel y Gas Natural Vehicular (GNV), dada la recomposicion que ha presentado esta industria entre el 2003 y 2012, con el objetivo de determinar si estos combustibles se comportan como sustitutos o complementarios y se trata de bienes necesarios o no. Los principales resultados indican que la elasticidad precio de la demanda de la Gasolina y el Diesel son bienes inelasticos, mientras que el GNV se comporta como un bien elastico. Por su parte, por medio de la elasticidad precio cruzada de la demanda, se encuentra que solo el Diesel y el GNV se comportan como bienes sustitutos, mientras que para el resto de relaciones (Gasolina-Diesel y Gasolina- GNV) se observa un comportamiento de complementariedad. Ademas desde la elasticidad gasto de la demanda se encontro que la Gasolina y el Diesel se comportan como bienes normales, mientras que el GNV resulta ser un bien inferior.English Abstract: This article presents an Almost Ideal Demand System (AIDS) for different types of fuels in Colombia, focusing specifically on the transport industry. Estimates of price, expenditure and cross elasticities are computed using a Seemingly Unrelated Regressions (SUR) model and based on 10 years observations (2003-2012). Results show that diesel and regular gas behave as inelastic goods while natural gas is more elastic. Also, diesel fuels and natural gas seem to behave as substitutes while there’s a complementary relation among the others (regular gas-Diesel; regular fuels-Natural Gas). Regarding the expenditures elasticities, this paper concludes that regular gas and diesel behave as normal goods while natural gas seems be an inferior type of fuel for the transport sector.)","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130555811","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper contributes to empirical literature testing the importance of secure formal legal rights for efficient natural resource exploitation and the promotion of economic growth and development. We use an event study methodology to estimate the market response to a series of six landmark Supreme Court of Canada decisions that reinterpreted aboriginal rights in Canada, providing a shock to the stability and security of the existing entitlements of Canadian resource firms. The paper expands on our earlier study of Canada’s Forest industry to test claims that recognition of aboriginal rights has created uncertainty imposing significant economic costs on Canada’s resource industries. We construct a new data set containing all firms listed on the TSX operating in the Forestry, Mining, and Energy sectors. Using this data set of 2,410 firm-events and corresponding firm level micro-data we provide evidence of the market response to the decisions for the resource sector globally, by industry and across firm characteristics. Our results show that the decisions generated statistically and economically significant effects, and generally support the importance of secure legal rights to the economic performance of resource industries. However, the effects vary in size and direction across decisions, industries, and firm-types.
{"title":"The Supreme Court's Aboriginal Rights Cases & Canada's Resource Industries: Estimating the Economic Effects","authors":"I. Keay, Cherie Metcalf","doi":"10.2139/ssrn.2876942","DOIUrl":"https://doi.org/10.2139/ssrn.2876942","url":null,"abstract":"This paper contributes to empirical literature testing the importance of secure formal legal rights for efficient natural resource exploitation and the promotion of economic growth and development. We use an event study methodology to estimate the market response to a series of six landmark Supreme Court of Canada decisions that reinterpreted aboriginal rights in Canada, providing a shock to the stability and security of the existing entitlements of Canadian resource firms. The paper expands on our earlier study of Canada’s Forest industry to test claims that recognition of aboriginal rights has created uncertainty imposing significant economic costs on Canada’s resource industries. We construct a new data set containing all firms listed on the TSX operating in the Forestry, Mining, and Energy sectors. Using this data set of 2,410 firm-events and corresponding firm level micro-data we provide evidence of the market response to the decisions for the resource sector globally, by industry and across firm characteristics. Our results show that the decisions generated statistically and economically significant effects, and generally support the importance of secure legal rights to the economic performance of resource industries. However, the effects vary in size and direction across decisions, industries, and firm-types.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"105 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127647053","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper empirically analyzes the existence of market power in the global iron ore market during the period 1993-2012 using an innovative Stochastic Frontier Analysis approach introduced by Kumbhakar et al. (2012). In contrast to traditional econometric procedures, this approach allows for the estimation of firm- and time-specific Lerner indices and, therefore, the assessment of the influence of individual firm characteristics on the ability to generate markups. We find that markups on average amount to 20%. Moreover, location and experience are identified to be the most important determinants of the magnitude of firm-specific markups.
本文采用创新的随机前沿分析方法(Kumbhakar et al.， 2012)对1993-2012年全球铁矿石市场中市场支配力的存在性进行了实证分析。与传统的计量经济学程序相比，这种方法允许估计企业和特定时间的勒纳指数，因此，评估个别企业特征对产生加价能力的影响。我们发现平均加价达20%。此外，地点和经验被认为是企业特定加价幅度的最重要决定因素。
{"title":"Investigating the Influence of Firm Characteristics on the Ability to Exercise Market Power – A Stochastic Frontier Analysis Approach with an Application to the Iron Ore Market","authors":"Robert Germeshausen, T. Panke, Heike Wetzel","doi":"10.2139/ssrn.2551754","DOIUrl":"https://doi.org/10.2139/ssrn.2551754","url":null,"abstract":"This paper empirically analyzes the existence of market power in the global iron ore market during the period 1993-2012 using an innovative Stochastic Frontier Analysis approach introduced by Kumbhakar et al. (2012). In contrast to traditional econometric procedures, this approach allows for the estimation of firm- and time-specific Lerner indices and, therefore, the assessment of the influence of individual firm characteristics on the ability to generate markups. We find that markups on average amount to 20%. Moreover, location and experience are identified to be the most important determinants of the magnitude of firm-specific markups.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"41 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124124541","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigates the adjustment of the prices of four key petroleum products in the UK following changes in the price of crude oil. We find significant evidence that the pre-tax prices of diesel, kerosene, and gas oil adjust more rapidly in an upward than a downward direction, but that the pre-tax price of unleaded petrol adjusts symmetrically. However, these patterns are obscured at the pump once one accounts for fuel duty and value-added tax, raising the possibility that firms can use the tax system to conceal rent-seeking behaviour.
{"title":"Taxation and the Asymmetric Adjustment of Selected Retail Energy Prices in the UK","authors":"Matthew Greenwood‐Nimmo, Y. Shin","doi":"10.2139/ssrn.2278643","DOIUrl":"https://doi.org/10.2139/ssrn.2278643","url":null,"abstract":"This paper investigates the adjustment of the prices of four key petroleum products in the UK following changes in the price of crude oil. We find significant evidence that the pre-tax prices of diesel, kerosene, and gas oil adjust more rapidly in an upward than a downward direction, but that the pre-tax price of unleaded petrol adjusts symmetrically. However, these patterns are obscured at the pump once one accounts for fuel duty and value-added tax, raising the possibility that firms can use the tax system to conceal rent-seeking behaviour.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"92 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124650823","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we investigate the use of forecast averaging for electricity spot prices. While there is an increasing body of literature on the use of forecast combinations, there is only a small number of applications of these techniques in the area of electricity markets. In this comprehensive empirical study we apply seven averaging and one selection scheme and perform a backtesting analysis on day-ahead electricity prices in three major European and US markets. Our findings support the additional benefit of combining forecasts for deriving more accurate predictions, however, the performance is not uniform across the considered markets. Interestingly, equally weighted pooling of forecasts emerges as a viable robust alternative compared with other schemes that rely on estimated combination weights. Overall, we provide empirical evidence that also for the extremely volatile electricity markets, it is beneficial to combine forecasts from various models for the prediction of day-ahead electricity prices. In addition, we empirically demonstrate that not all forecast combination schemes are recommended.
{"title":"An Empirical Comparison of Alternate Schemes for Combining Electricity Spot Price Forecasts","authors":"J. Nowotarski, Eran Raviv, S. Trück, R. Weron","doi":"10.2139/ssrn.2313553","DOIUrl":"https://doi.org/10.2139/ssrn.2313553","url":null,"abstract":"In this paper we investigate the use of forecast averaging for electricity spot prices. While there is an increasing body of literature on the use of forecast combinations, there is only a small number of applications of these techniques in the area of electricity markets. In this comprehensive empirical study we apply seven averaging and one selection scheme and perform a backtesting analysis on day-ahead electricity prices in three major European and US markets. Our findings support the additional benefit of combining forecasts for deriving more accurate predictions, however, the performance is not uniform across the considered markets. Interestingly, equally weighted pooling of forecasts emerges as a viable robust alternative compared with other schemes that rely on estimated combination weights. Overall, we provide empirical evidence that also for the extremely volatile electricity markets, it is beneficial to combine forecasts from various models for the prediction of day-ahead electricity prices. In addition, we empirically demonstrate that not all forecast combination schemes are recommended.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"92 25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125015419","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the impact of oil revenues on the Iranian economy over the past hundred years, spanning the period 1908-2010. It is shown that although oil has been produced in Iran over a very long period, its importance in the Iranian economy was relatively small up until the early 1960s. It is argued that oil income has been both a blessing and a curse. Oil revenues when managed appropriately are a blessing, but their volatility (which in Iran is much higher than oil price volatility) can have adverse effects on real output, through excessively high and persistent levels of inflation. Lack of appropriate institutions and policy mechanisms which act as shock absorbers in the face of high levels of oil revenue volatility have also become a drag on real output. In order to promote growth, policies should be devised to control inflation; to serve as shock absorbers negating the adverse effects of oil revenue volatility; to reduce rent seeking activities; and to prevent excessive dependence of government finances on oil income.
{"title":"One Hundred Years of Oil Income and the Iranian Economy: A Curse or a Blessing?","authors":"Kamiar Mohaddes, M. Pesaran","doi":"10.4324/9781315867205-9","DOIUrl":"https://doi.org/10.4324/9781315867205-9","url":null,"abstract":"This paper examines the impact of oil revenues on the Iranian economy over the past hundred years, spanning the period 1908-2010. It is shown that although oil has been produced in Iran over a very long period, its importance in the Iranian economy was relatively small up until the early 1960s. It is argued that oil income has been both a blessing and a curse. Oil revenues when managed appropriately are a blessing, but their volatility (which in Iran is much higher than oil price volatility) can have adverse effects on real output, through excessively high and persistent levels of inflation. Lack of appropriate institutions and policy mechanisms which act as shock absorbers in the face of high levels of oil revenue volatility have also become a drag on real output. In order to promote growth, policies should be devised to control inflation; to serve as shock absorbers negating the adverse effects of oil revenue volatility; to reduce rent seeking activities; and to prevent excessive dependence of government finances on oil income.","PeriodicalId":436211,"journal":{"name":"ERN: Natural Resource Economics (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-02-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129212391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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