How Does Crude oil Affect the Economy?

Importance of oil in the Argentine economy

The oil economy in a politicized and global market. Mexico and Colombia, by Professor Alicia Puyana Mutis, from the Flacso Institute of Mexico, is a highly relevant book nowadays due to the hydrocarbon situation that is impacting the world. All academics and people interested in a clear and updated exposition on world oil development and its nuances for these two countries will find here a source of precise and formalized knowledge to understand the history of the sector, the political economy of oil, the impact of its prices on world socioeconomic development and how Colombia1 and Mexico have become involved in the oilization of their economies.

The paper highlights why oil and hydrocarbons have become the lifeblood of the orbital economic and socio-political system and its control as the axis of world politics. Through the examples of the two countries, with clarity and acuity, Professor Puyana analyzes how the bonanzas of production and prices were transformed into a systematic depletion of reserves, the petroleumization of fiscal accounts2, the decline of agriculture and the manufacturing sector, and the precariousness of employment and income. A work that sheds light on the probable effects of the recent Mexican energy reform and the fiscal impact of the sector for Colombia3 is undoubtedly a great contribution to the national and international understanding of the oil problematic, so fashionable nowadays.

Read more  What is government total expenditure?

Importance of oil in the Colombian economy.

Since June 2014, oil prices, in US dollars, have fallen by approximately 65% (about USD 70) in an environment in which growth in a wide range of countries has been progressively slowing. Even taking into account the 20% appreciation of the dollar during this period (in nominal effective values), the reduction in oil prices in other currencies has averaged more than $60. This has puzzled many observers, including us here at the IMF, who believed that these price declines would be beneficial to the world economy, since while they would obviously be harmful to exporters, they would bring benefits to importers, thus more than offsetting that effect. The main assumption underlying this belief is the concrete difference in saving behavior between oil-importing and oil-exporting countries: consumers in the former, such as in Europe, have a greater marginal tendency to spend their income than consumers in the latter, such as in Saudi Arabia.

The fall in oil prices and its impact on the national economy 2020

For BBVA Research, the drop in the price of crude oil will have an impact on the national economy.

The fall in oil prices and its impact on the national economy 2020

For BBVA Research, the drop in the price of crude oil will have an impact on the national economy.

Read more  Who can buy in a 55 community?