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- Title
Petroleum Producing and Consuming Countries: A Coalescence of Interests.
- Authors
Munkirs, John R.; Knoedler, Janet T.
- Abstract
To understand the economics of the petroleum industry, one must keep two propositions firmly in mind: supply and demand analysis in the traditional neoclassical price/quantity equilibrium sense is totally inappropriate; second, the world community's fundamental problem in the production and use of petroleum products, has been in the past, is now, and will be into the foreseeable future, the ever-present dilemma of potential surpluses. The argument presented herein contains four parts: an analysis of the scarcity-surplus question; a brief examination of the protagonists involved in the erratic 1971-1986 production/price swings; a short summary of the negative effects incurred by the producing, consuming, and developing countries; and finally, the advancement of a new conceptual approach for understanding the world-wide petroleum production process. The United States is still the strongest economic unit in the world. It must reassert its leadership in establishing a mechanism to stabilize the supply and demand of this most strategic of all commodities. The organizational mechanism created must be able to protect the self-interests of each individual producing, consuming and developing country, as well as their collective self-interests.
- Subjects
UNITED States; PETROLEUM industry; ECONOMICS; SUPPLY &; demand; SCARCITY; PETROLEUM products; BALANCE of trade; PRODUCTION (Economic theory); DEVELOPED countries
- Publication
Journal of Economic Issues (Association for Evolutionary Economics), 1988, Vol 22, Issue 1, p17
- ISSN
0021-3624
- Publication type
Article
- DOI
10.1080/00213624.1988.11504731