We discuss and reconcile two diametrically opposed views concerning the future of world oil production and prices. The geological view expects that physical constraints will dominate the future evolution of oil output and prices. It is supported by the fact that world oil production has plateaued since 2005 despite historically high prices, and that spare capacity has been near historic lows. The technological view of oil expects that higher oil prices must eventually have a decisive effect on oil output, by encouraging technological solutions. It is supported by the fact that high prices have, since 2003, led to upward revisions in production forecasts based on a purely geological view. We present a nonlinear econometric model of the world oil market that encompasses both views. The model performs far better than existing empirical models in forecasting oil prices and oil output out of sample. Its point forecast is for a near doubling of the real price of oil over the coming decade. The error bands are wide, and reflect sharply differing judgments on ultimately recoverable reserves, and on future price elasticities of oil demand and supply.
Big paper of the semester
100% sans-serif
Justified spacing
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Look at how NFC has become as ubiquitous as credit cards (and is in every new phone) in Asia. It is just the next logical step to the wildly successful contactless transit/credit/debit cards used in cities all around the world, like Boston’s Charlie Cards, and AMEX cards.
Petroleum - Forecasting Supply Shocks
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full-res: http://twitpic.com/8p8pyd/full
The rapper Drake has, if you go by one of his song’s lyrics, a short list of interests. The first is money. The second is the city of Toronto. In the world of hip-hop, it’s not outlandish to identify the acquisition of wealth as a motivator, nor is it particularly odd to claim mythical status in one’s hometown. At the ripe old age of 25, Drake estimates his worth to be about $25 million.
But “I run Toronto”? That part is different.
http://www.npr.org/blogs/therecord/2012/01/09/144912277/fact-checking-drake-does-toronto-really-love-him
This was published in Nature, it’s not for free online so imma post it.
“Governments that fail to plan for the decline of fossil-fuel production will be faced with potentially major blows to their economies even before rising sea levels flood their coasts or crops begin to fail catastrophically.”
https://docs.google.com/open?id=0BwWa-N1OnWgHMTQ0ZDg2YTUtNzYzMi00MzcxLWIxNTMtNTVkZjFhMjFmYWMw
“The deleveraging processes in Sweden and Finland in the 1990s offer relevant lessons today. Both endured credit bubbles and collapses, followed by recession, debt reduction, and eventually a return to robust economic growth. Their experiences and other historical examples show two distinct phases of deleveraging. In the first phase, lasting several years, households, corporations, and financial institutions reduce debt significantly. While this happens, economic growth is negative or minimal and government debt rises. In the second phase of deleveraging, GDP growth rebounds and then government debt is gradually reduced over many years….
As of January 2012, the United States is most closely following the Nordic path towards deleveraging. Debt in the financial sector has fallen back to levels last seen in 2000, before the credit bubble, and the ratio of corporate debt relative to GDP has also fallen. US households have made more progress in debt reduction than other countries, and may have roughly two more years before returning to sustainable levels of debt.”
