Oil Crisis

Oil Crisis Uploaded by uncdude on Jul 3, 2005 ________________________________________ Oil Crisis Oil is the major(ip) source of energy worldwide and it is expected to rebriny so over the next few decades. As the technology is ever-changing our environment nowadays, crude crude has done it in the 20s and 30s. Ever since, then crude oil has become the main raw material in every frugality no matter it is a developed one or it is in the developing process. The changes in the prices of the crude oil are devising positive and negative implications on every economy. When these changes of prices are ascetical ones, one might easily conclude that an economy is sacking to face difficultys such as unfavorable cater shocks, or according to the theory adverse supply shocks. When these kinds of problem stand in the world oil market, it is usually described as a world oil crisis. The world has witnessed 2 major oil crises and it is facing another one at the moment. In pose to discuss the recent oil crisis and its economic implications I am going to refer to the appropriated economic theory and I will also examine the two previous oil shocks in the world. As I mentioned previously the major problem that an economy is facing during every oil crisis is the adverse supply shock.

Adverse supply shocks are unexpected events that reduce pile up supply and therefore the output decreases and prices increase. In the language of economy we call this stagflation . Furthermore, I will refer to the organization that has caused the collar supply shocks so far. OPEC, the Organization of Petroleum Exporting Countries, has the force out to control the world oil prices by its reduction in the world oil supply. Thats what has done in the oil crisis that had happened in the early 70s(Mankiw 252). OPECs reduction in the supply of oil had doubled the world oil price instantly. As I said previously this had caused stagflation in every oil importation country. In addition I will refer to the US statistic about the... If you want to get a full essay, order it on our website: Orderessay

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