The recycling of oil revenues: some theoretical aspects

Working paper

We investigate the stability properties of a non-tatonnement price and monetary adjustment mechanism involving an oil exporting and an oil importing country. The distinguishing characteristic of the paper is that it attempts to bring together some elements of the disequilibrium theory of exhaustible resources and the monetary approach to the balance of payments using a Hicksian, temporary equilibrium framework. We show that a sufficient condition for stability is that the marginal propensity to consume out of an increase in money wealth is the same in both countries.

Authors: Stournaras, Y

• Publication status: Published
• Peer review status: Reviewed (other)
• Publisher: Oxford Institute for Energy Studies
• Series: OIES paper
• Publication date: 1984-01-01
• Edition: Publisher's version
• Paper number: F1
• ISBN: 0948061049
• Language: English
• Keywords: asset; OIES; commodity; international trade; Oil Revenues Management; Oil Importing Countries; stability; temporary equilibrium; oil-exporting countries; price dynamics; exhaustible resources