OECD's December 2004 assessment of economic developments and prospects. In addition to the regular economic assessments and statistical information, this issue includes articles examining oil price developments and savings behaviour and the effectiveness of fiscal policy.Click to Access:
- 12 Jan 2005
- DOI :
Oil PriceDevelopments Drivers, Economic Consequences and Policy ResponsesClick to Access:
- Pages :
- DOI :
The oil price has more than doubled in dollar terms since the late 1990s, while increasing substantially, though somewhat less, in terms of the other major currencies. The chapter begins by investigating the fundamentals driving longer-term oil market developments and the implications for the long-run equilibrium price. It then identifies short-term influences which may have caused risk premia to rise, volatility to increase, and the oil price to diverge from its equilibrium. It concludes with an assessment of the impact of higher oil prices on OECD growth and inflation and the implications for economic policy.
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