A Simultaneous Equations Model for World Crude Oil and Natural Gas Markets, Issues 2005-2032

Front Cover
International Monetary Fund, Feb 1, 2005 - Business & Economics - 24 pages
0 Reviews
A model for world crude oil and natural gas markets is estimated. It confirms low price and high income elasticities of demand for both crude oil and natural gas, which explains the market power of oil producers and price volatility following shocks. The paper establishes a relationship between oil prices, changes in the nominal effective exchange rate (NEER) of the U.S. dollar, and the U.S. interest rates, thereby identifying demand shocks arising from monetary policy. Both interest rates and the NEER are shown to influence crude prices inversely. The results imply that crude oil prices should be included in the policy rule equation of an inflation targeting model.

From inside the book

What people are saying - Write a review

We haven't found any reviews in the usual places.

Contents

Introduction
3
Relation Between Oil Prices Interest Rates and the U S Dollar NEER
16
Appendix Data Sources
23
Copyright

Other editions - View all

Common terms and phrases

Bibliographic information