ISSN: 2225-8329
Open access
This research examines the influence of an increase in the price of oil on a developing economy. We consider the area to which the influences of oil price revelation depend upon the economy's internal production structure and its approach to the world financial market, and find that the long-run influence depends more on the earlier than the latter. Two unfavorable quantities which the long-run effects are (i) the relative share of oil to labor in production and (ii) the elasticity of replacement in production. We increase the unapproachable examination with numbers pretends, thereby allowing us to distinguish the short-run actives. In general, the affections can replicate much of the empirical evidence used to distinguish the effects of the recent oil price increases on the economy. They also focus the responsiveness of the effect of the oil price to the elasticity of replacement.
Alaimo, V., Lopez, H. (2008). Oil intensities and oil prices: Evidence for Latin America. Policy Research Working Paper 4640, The World Bank, Washington DC.
Atkeson, A., Kehoe, P. J. (1999). Models of energy use: putty-putty versus putty-clay.
American Economic Review 89, 1028–1043.
Backus, D. K., Crucini, M. J. (2000). Oil prices and the terms of trade. Journal of International Economics 50, 185–213.
Bodenstein, M., Erceg, C. J., Guerrieri, L. (2007). Oil shocks and external adjustment. International Finance Discussion Papers Number 897.
Chung, K., Turnovsky, S.J., (2010). Foreign debt supply in an imperfect international capital market: Theory and evidence. Journal of International Money and Finance 29, 201–223.
Dargay, J., Gately, D. (1995). The response of world energy and oil demand to income growth and changes in oil prices. Annual Review of Energy and the Environment 20, 145–178.
Dhawan, R., Jeske, K. (2006). How resilient is the modern economy to energy price shocks? Economic Review. Federal Reserve Bank of Atlanta, pp. 21–32.
Duffy, J., Papageorgiou, C. (2000). A cross-country empirical investigation of the aggregate production function specification. Journal of Economic Growth 5, 87–120.
Edwards, S. (1984). LDC foreign borrowing and default risk: an empirical investigation, 1976–80. American Economic Review 74, 726–734.
Gupta, E. (2008). Oil vulnerability index of oil-importing countries. Energy Policy 36, 1195–1211.
Hamilton, J. D. (1983). Oil and the macroeconomy since World War II. Journal of Political Economy 91, 228–248.
Hamilton, J. D. (1996). This is what happened to the oil price-macro economy relationship. Journal of Monetary Economics 38, 215–220.
Hamilton, J.D., (2003). What is an oil shock? Journal of Econometrics 113, 363–398.
Ibrahim, I.B., Hurst, C., (1990). Estimating energy and oil demand functions: a study of thirteen developing countries. Energy Economics 12, 93–102.
International Energy Agency. (2004). Analysis of the influence of high oil prices on the global economy. Energy Prices and Taxes 2nd Quarter, pp. xi–xix.
Kilian, L., Vigfusson, R. J. (2009). Pitfalls in estimating abalanced effects of energy price shocks. http://www-personal.umich.edu/~lkilian/kv14apr09.pdf.
Kilian, L., Rebucci, A., Spatafora, N. (2009). Oil shocks and external balances. Journal of International Economics 77, 181–194.
Min, H. G. (1998). Determinants of Emerging Market Bond Spread: Do Economic Fundamentals Matter? World Bank Policy Research Paper No. 1899.
Mork, K. A. (1989). Oil and the macroeconomy when prices go up and down: an extension of Hamilton's results. Journal of Political Economy 97, 740–744.
Nordhaus, W. (2007). Who's afraid of a big bad oil shock? Brookings Papers on Economic Activity 2, 219–238.
OECD. (2004). Oil price developments: Drivers, economic consequences and policy responses. In: OECD Economic Outlook No. 76, ch. IV, 1–29.
Pindyck, R.S., Rotemberg, J.J., (1983). Dynamic factor demands and the effects of energy price shocks. American Economic Review 73, 1066–1079.
Rebucci, A., Spataforta, N., (2006). Oil prices and global imbalances. In: IMF World Economic Outlook, April 2006, ch. II, 71–96.
World Economic Outlook. (2008), IMF, October 2008, Ch. 3: Is Inflation Back? Commodity Prices and Inflation, IMF, Washington, DC.
World Energy Outlook. (2008), International Energy Agency, Paris.
Zoli, E. (2004). Credit rationing in emerging economies' access to global capital markets.
IMF Working Paper WP/04/70.
In-Text Citation: (Maroofi & Kafchehi, 2012)
To Cite this Article: Maroofi, F., & Kafchehi, P. (2012). The Influence of Oil Prices on an Oil-Importing Developing Economy. International Journal of Academic Research in Accounting Finance and Management Sciences, 2(4), 345–363.
Copyright: © 2021 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode