The Changing Face of World Oil Markets

Here’s the introduction to a new paper I just finished:

This year the oil industry celebrated its 155th birthday, continuing a rich history of booms, busts and dramatic technological changes. Many old hands in the oil patch may view recent developments as a continuation of the same old story, wondering if the high prices of the last decade will prove to be another transient cycle with which technological advances will again eventually catch up. But there have been some dramatic changes over the last decade that could mark a major turning point in the history of the world’s use of this key energy source. In this article I review five of the ways in which the world of energy may have changed forever.

Below I provide a summary of the paper’s five main conclusions along with a few of the figures from the paper.

Continue reading

Unanchored

In a recent article, Amity Shlaes asserts official statistics mismeasure how we experience inflation. I’m going to agree, but not for the reasons you might think. It’s not because John Williams’ Shadowstats, which she appeals to, is right (Jim has comprehensively documented why each and every person who cites that source should be drummed out of the society of economists or aspiring economic commentators). Rather it’s because I think people do have biases — i.e., the steady-state rational expectations hypothesis might not be applicable.

Continue reading