Robustness of US Economy and Energy Supply/Demand Fluctuations

Robustness of US Economy and Energy Supply/Demand Fluctuations

Alireza Aslani (Interdisciplinary Department, Faculty of New Sciences and Technology, University of Tehran, Tehran, Iran), Morteza Niknejad (University of Tehran, Tehran, Iran) and Amin Maghami (University of Tehran, Tehran, Iran)
Copyright: © 2017 |Pages: 15
DOI: 10.4018/IJEOE.2017100101
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Abstract

Energy has a strategic role in social and economic development of the countries. Due to the high dependency of energy supply on fossil fuels, fluctuations in prices and supply have macro/micro-economics effects for both energy exporters and importers. Therefore, understanding economic stability based on energy market changes is an important subject for policy makers and researchers. The US, as the first energy consumer in the world, is an interesting country to analyze the relationships of economics robustness with fossil fuel economic-fluctuations. While the country has one of the pioneers in domestic energy utilization, the competitiveness of the country is highly dependent on energy prices. In this paper, the researchers investigate the effects of energy changes on the economics of the US. First, the impact of oil price on macro-economic parameters is discussed. After that, the main issues related to energy economics including resilience of the energy sector, energy policies, economics analysis of the energy sector, electricity markets are discussed.
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Oil Price Importance And The Impact Of Us Economic Crisis On It

One of the effective factors on economies is oil price and its fluctuations. Rising oil prices benefit the oil exporting countries and price reduction is in favor of importing countries.

Oil price affects the macroeconomics and microeconomics factors such as inflation, GDP, interest rates, currency, unemployment, price levels, industrial growth and budget of oil exporter and importer countries. Undoubtedly US is one of the biggest oil-dependent economies that play an important role in oil supply and demand.

There are many factors causing oil price fluctuations, but the following are some of the factors we mentioned. Financial crisis in US can be mentioned as the first reason of oil price reduction. Poor infrastructure and vulnerability of other economies spread the crisis in other countries and imposed depression on the global economy. Global depression naturally decreases demand for goods and services like crude oil. Since US owns 25 percent of global oil production and is known as the largest consumer of crude oil in the world, US decline in oil demand as a result of depression, had a significant impact in reducing oil price.

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