Show Less
You do not have access to this content

Monetary Policy and Crude Oil

Prices, Production and Consumption

Basil Oberholzer

The global crude oil market is critically important in many respects. It is the fuel that drives the global economy and, as such, is the focus of climate policies. Moreover, crude oil is the basis of a tradable financial asset. It is therefore connected to several outstanding macroeconomic developments of recent years, including financial market fluctuations, the financial crisis and the exceptional conduct of monetary policy. This book investigates the impacts of monetary policy and the financial system on the global crude oil market. Furthermore, it outlines how monetary policy may also be used to guarantee stability and to contribute to ecological sustainability.
Show Summary Details
You do not have access to this content

Chapter 5: Economic policy propositions: an overview

Prices, Production and Consumption

Basil Oberholzer

Extract

This chapter starts with the identification of the main problems arising from the connections of monetary policy and financial markets with the crude oil market. First, financial investment in the oil futures market enhances oil price volatility and hence financial and economic instability. Second, since an increased oil price caused by speculation raises investment in the spot market, we end up with higher oil production and consumption, which is a problem against the background of climate change. Several existing policy propositions aiming at addressing stability and ecological sustainability are considered. These are futures market regulation, counteracting oil market interventions, an oil supply target and a tax on oil production. All of the approaches feature some strengths and some weaknesses.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.