We present a general equilibrium model of the global oil market, in which the oil price, oil production, and consumption, are jointly determined as outcomes of the optimizing decisions of oil importers and oil exporters. On the supply side the oil market is modelled as a dominant firm – Saudi...

Saudi Arabia Is The Largest Player In The World Oil Market. It Maintains Ample Spare Capacity, Restricts Investment In Developing Reserves, And Its Output Is Negatively Correlated With Other Opec Producers. While This Behavior Does Not F T Into The Perfect Competition Paradigm, We Show That It...

Oil prices have fluctuated considerably in the last few years, with major effects on the economy. This paper describes some of the mechanisms by which these fluctuations produce changes in the long-run growth of the economy. In particular, it analyses the effect on productivity, capital stock...