@article{Cologni:115725,
      recid = {115725},
      author = {Cologni, Alessandro and Manera, Matteo},
      title = {On the Economic Determinants of Oil Production.  Theoretical Analysis and Empirical Evidence for Small  Exporting Countries},
      address = {2011-07},
      number = {830-2016-55315},
      series = {ERM},
      pages = {65},
      year = {2011},
      abstract = {In this paper, decisions regarding production in oil  exporting countries are studied by means of theoretical  analysis and empirical investigation. Under the assumptions  of exogenous oil prices and world oil demand, we are able  to describe the relationship between oil production levels  and changes in the conditions in world oil markets.  Intertemporal production decisions by a representative oil  producer are modelled by means of a partial equilibrium  model. In this theoretical model, oil producers are subject  to exogenous shocks in world oil demand and prices. Oil  companies can change output levels only by incurring a  fixed cost. Results from the simulation of this model show  a strong relationship between oil production and changes in  world oil consumption. On the contrary, the effects of  changes in real oil prices on oil production decisions seem  to be much lower. Results from the simulation of the  theoretical model are then empirically investigated using  time-series econometric techniques. The empirical evidence  supports the hypothesis that several oil producing  countries are characterized by different responses to  changes in world oil demand and in real oil prices. For  many countries production rapidly adjusts to changes in  consumption whereas responses of oil production to  innovations in real oil prices are found to be not  statistically significant. In addition, when  non-linearities in the relationship between exogenous  variables and output levels are allowed for, evidence of  asymmetric effects of output levels to shocks in demand  levels and oil prices is found.},
      url = {http://ageconsearch.umn.edu/record/115725},
      doi = {https://doi.org/10.22004/ag.econ.115725},
}