Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
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Real-Time Analysis of Oil Price Risks Using Forecast Scenarios
Recently, there has been increased interest in real-time forecasts of the real price of crude oil. Standard oil price forecasts based on reduced-form regressions or based on oil futures prices do not allow consumers of forecasts to explore how much the forecast would change relative to the baseline forecast under alternative scenarios about future oil demand and oil supply conditions. -
The Role of Time-Varying Price Elasticities in Accounting for Volatility Changes in the Crude Oil Market
There has been a systematic increase in the volatility of the real price of crude oil since 1986, followed by a decline in the volatility of oil production since the early 1990s. We explore reasons for this evolution. We show that a likely explanation of this empirical fact is that both the short-run price elasticities of oil demand and of oil supply have declined considerably since the second half of the 1980s. -
Portfolio Considerations in Differentiated Product Purchases: An Application to the Japanese Automobile Market
Consumers often purchase more than one differentiated product, assembling a portfolio, which might potentially affect substitution patterns of demand and, as a consequence, oligopolistic firms’ pricing strategies. -
Real-Time Forecasts of the Real Price of Oil
We construct a monthly real-time data set consisting of vintages for 1991.1-2010.12 that is suitable for generating forecasts of the real price of oil from a variety of models. -
The Role of Financial Speculation in Driving the Price of Crude Oil
Over the past 10 years, financial firms have increased the size of their positions in the oil futures market. At the same time, oil prices have increased dramatically. -
Forecasting the Price of Oil
We address some of the key questions that arise in forecasting the price of crude oil. What do applied forecasters need to know about the choice of sample period and about the tradeoffs between alternative oil price series and model specifications? -
How Changes in Oil Prices Affect the Macroeconomy
We estimate a New Keynesian general-equilibrium open economy model to examine how changes in oil prices affect the macroeconomy. Our model allows oil price changes to be transmitted through temporary demand and supply channels (affecting the output gap), as well as through persistent supply side effects (affecting trend growth). -
The Outlook for the Global Supply of Oil: Running on Faith?
The dramatic reduction in global demand, and the decline in the spot price of crude oil in the second half of last year, may have significant implications for the future supply of oil. Investments in conventional methods of extraction have been constrained, since easily accessible oil reserves are typically concentrated in countries with geopolitical uncertainty and/or state-run oil companies. -
An Overview of Carbon Markets and Emissions Trading: Lessons for Canada
The author provides an overview of carbon markets and explains how emissions trading can be important in encouraging the reduction of CO2 emissions in an efficient manner. He describes the key steps in establishing a cap-and-trade system, and reviews the European experiences with emissions trading. He highlights the lessons learned from the EU Emissions Trading […]