TITLE

THE ECONOMIC CONSEQUENCES OF THE ENERGY CRISIS

AUTHOR(S)
Pollack, Gerald A.
PUB. DATE
April 1974
SOURCE
Foreign Affairs;Apr74, Vol. 52 Issue 3, p452
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article examines the impact of the crisis in the petroleum export and import trade on world economics. The starting point for an analysis of the monetary impact of the energy crisis is the quantum jump in import bills implied by higher oil prices. For the United States, Europe and Japan, oil imports this year may be nearly $50 billion more than in 1973. If demand does not fall off appreciably when prices rise and if supplies remain tight, import bills will keep rising. By 1985 they might well approach$200 billion, some $150 billion more than in 1973. The Organization of Petroleum Exporting Countries (OPEC) investable surpluses may total nearly $100 billion by the end of 1974, and could cumulate to almost $500 billion by 1980 and more than $600 billion by 1985. In the long run, domestic investment by OPEC will feed back on the balance of payments, for example, by generating locally produced goods that can displace imports or gain a foothold in foreign markets. Indeed, given their small population base, industrialization of the Gulf states would necessarily make them dependent on the export markets of their oil customers for profitable operations.
ACCESSION #
5810821

 

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