英语论文网

rupt and the more pronounced the price increase and are magnified by the impact of higher prices on consumer and business confidence.

An oil-price increase also changes the balance of trade between countries and exchange rates. Net oil-importing countries normally experience deterioration in their balance of payments and putting downward pressure on exchange rates. As a result, imports become more expensive and exports less valuable, leading to a drop in real national income. Without a change in central bank and government monetary policies, the dollar may tend to rise as oil-producing countries’ demand for dollar-denominated international reserve assets grow.

The economic and energy-policy response to a combination of higher inflation, higher unemployment, lower exchange rates and lower real output also affects the overall impact on the economy over the longer term. Government policy cannot eliminate the adverse impacts described above but it can minimize them. Similarly, inappropriate policies can worsen them.

Overly contractionary monetary and fiscal policies to contain inflationary pressures could exacerbate the recessionary income and unemployment effects. On the other hand, expansionary monetary and fiscal policies may simply delay the fall in real income necessitated by the increase in oil prices, stoke up inflationary pressures and worsen the impact of higher prices in the long run.

Impact on OECD Countries

OECD countries remain vulnerable to oil-price increases, despite a drop in the region’s net oil imports and an even more marked decline in oil intensity since the first oil shock. Net imports fell by 14% while the amount of oil the OECD used to produce one dollar of real GDP halved between 1973 and 2006. Nonetheless, the region remains heavily dependent on imports to meet its oil needs, amounting to 56% in 2006. Only Canada, Denmark, Mexico, Norway and the United Kingdom are currently net exporting countries. Oil imports are estimated to have cost the region as a whole over $360 billion in 2006 – equivalent to around 1% of GDP. The annual import bill has increased by about 30 % since 2005.

Higher oil prices have a significant adverse impact on OECD economic performance in the short term in this case, though their impact in the longer term is more limited (Table 1). The impact on the rate of GDP growth is felt mostly in the first two years as the deterioration in the terms of trade drives down income, which immediately undermines domestic consumption and investment.

OECD GDP is 0.4% lower in 2005 and 2006 compared to the base case. In all OECD regions, these losses start to diminish in the following years as global trade in non-oil goods and services recovers. Throughout the whole five-year projection period, GDP is 0.3% lower on average.

The impact of higher oil prices on the rate of inflation is more marked. The consumer price index is on average 0.5% higher than in the base case over the five year projection period. The impact on the rate of inflation was felt mostly in 2006 – the second year of higher prices. Recent trends show a clear correlation between oil price movements and short-term changes in the inflation rate.

The economic impact of higher oil prices varies considerably across OECD countries, largely according to the degree to which they are net importers of oil.