Publication:
The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses

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dc.contributor.authorStocker, Marc
dc.contributor.authorBaffes, John
dc.contributor.authorKose, M. Ayhan
dc.contributor.authorOhnsorge, Franziska
dc.date.accessioned2016-01-11T22:56:35Z
dc.date.available2016-01-11T22:56:35Z
dc.date.issued2015-03
dc.description.abstractThis note combines and distills existing and new research to inform discussion on the topical policy issue of oil prices. Following four years of relative stability at around $105 per barrel (bbl), oil prices have declined sharply since June 2014 and are expected to remain low for a considerable period of time. The drop in prices likely marks the end of the commodity supercycle that began in the early 2000s. Since the past episodes of such sharp declines coincided with substantial fluctuations in activity and inflation, the causes and consequences of and policy responses to the recent plunge in oil prices have led to intensive debates. This paper addresses four questions at the center of these debates, with particular emphasis on emerging market and developing economies: 1) How does the recent decline in oil prices compare with previous episodes? 2) What are the causes of the sharp drop and what is the outlook for oil price? 3) What are the economic and financial consequences? 4) What are the main policy implications? The decline in oil prices will lead to significant real income shifts from oil exporters to oil importers, likely resulting in a net positive effect for global activity over the medium term. However, several factors could counteract the global growth and inflation implications of the lower oil prices. These include weak global demand and limited scope for additional monetary policy easing in many countries. The disinflationary implications of falling oil prices may be muted by sharp adjustments in currencies and effects of taxes, subsidies, and regulations on prices. Regarding fiscal policy, the loss in oil revenues for exporters will strain public finances, while savings among oil importers could help rebuild fiscal space. Lower oil prices also present a window of opportunity to implement structural reforms. These include, in particular, comprehensive and lasting reforms of fuel subsidies, as well as energy taxes more broadly.en
dc.identifierhttp://documents.worldbank.org/curated/en/2015/12/25666189/great-plunge-oil-prices-causes-consequences-policy-responses
dc.identifier.doi10.1596/23611
dc.identifier.urihttps://hdl.handle.net/10986/23611
dc.languageEnglish
dc.language.isoen_US
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Note,PRN/15/01;
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo/
dc.subjectEMPLOYMENT
dc.subjectMERCHANDISE
dc.subjectCAPITAL MARKETS
dc.subjectDURABLE GOODS
dc.subjectNUCLEAR REACTORS
dc.subjectOIL PRICE
dc.subjectPRICE INCREASES
dc.subjectOIL EQUIVALENT
dc.subjectFOSSIL FUELS
dc.subjectOIL MARKETS
dc.subjectSTOCK
dc.subjectQUALITY ENERGY
dc.subjectWORLD OIL CONSUMPTION
dc.subjectMARKET DEVELOPMENTS
dc.subjectDEFLATION
dc.subjectOIL SPILLS
dc.subjectPRICE FORECASTS
dc.subjectACTIVITIES
dc.subjectAVERAGE PRICES
dc.subjectOIL OUTPUT
dc.subjectOIL SUPPLY
dc.subjectCLEAN ENERGY
dc.subjectGAS PRICES
dc.subjectGASOLINE
dc.subjectENERGY PRODUCTS
dc.subjectFAIR
dc.subjectOIL PRICE COLLAPSE
dc.subjectOIL EXPLORATION
dc.subjectPRICING
dc.subjectGAS
dc.subjectETHANOL
dc.subjectBARRELS PER DAY
dc.subjectPRICE
dc.subjectPEAK OIL
dc.subjectDOMESTIC OIL
dc.subjectOIL CONSUMPTION
dc.subjectOIL PRODUCTION
dc.subjectINFLATION
dc.subjectSTABLE PRICES
dc.subjectOILS
dc.subjectLABOR MARKET
dc.subjectPETROLEUM
dc.subjectOIL PRICES
dc.subjectLNG
dc.subjectNATURAL GAS PRICES
dc.subjectOIL DEMAND
dc.subjectLIQUEFACTION
dc.subjectAGRICULTURAL COMMODITIES
dc.subjectOIL
dc.subjectBARREL OIL
dc.subjectENERGY SOURCES
dc.subjectSUBSTITUTE PRODUCT
dc.subjectRAW MATERIALS
dc.subjectPETROLEUM EXPORTING COUNTRIES
dc.subjectOIL ACCOUNTS
dc.subjectOIL COMPANIES
dc.subjectDOMESTIC SUPPLY
dc.subjectSURPLUS
dc.subjectPRODUCTS
dc.subjectOPTIONS
dc.subjectOIL PRODUCTS
dc.subjectCRUDE OIL PRODUCTION
dc.subjectEMERGING MARKET
dc.subjectRECOVERABLE RESERVES
dc.subjectMARKETS
dc.subjectOIL IMPORTS
dc.subjectAGRICULTURAL PRICES
dc.subjectPRODUCT
dc.subjectTAX REVENUES
dc.subjectPRICE SUBSIDIES
dc.subjectINVENTORIES
dc.subjectFUEL DEMAND
dc.subjectPRICING POLICIES
dc.subjectINVENTORY
dc.subjectFUELS
dc.subjectFUEL COSTS
dc.subjectCOMMODITY PRICE
dc.subjectTAX POLICIES
dc.subjectPRICE CHANGE
dc.subjectEXPENDITURE
dc.subjectEMERGING MARKETS
dc.subjectPRICING MECHANISM
dc.subjectENERGY CONSUMPTION
dc.subjectGAS PROJECTS
dc.subjectSUBSTITUTE
dc.subjectCLIMATE CHANGE
dc.subjectVOLATILITY
dc.subjectBALANCE
dc.subjectOIL PRODUCER
dc.subjectMARKET CONDITIONS
dc.subjectMERCHANDISE EXPORTS
dc.subjectUTILITIES
dc.subjectPOWER
dc.subjectELECTRICITY
dc.subjectPRICE OF OIL
dc.subjectPRICE SUPPORT
dc.subjectDEMAND
dc.subjectAGGREGATE DEMAND
dc.subjectPRICE STABILITY
dc.subjectPRICE CHANGES
dc.subjectFOSSIL FUEL
dc.subjectEXPENDITURES
dc.subjectOIL EXPORTS
dc.subjectPRICE FLUCTUATIONS
dc.subjectOIL PRODUCERS
dc.subjectFUEL PRICES
dc.subjectCOST OF ENERGY
dc.subjectENERGY BILLS
dc.subjectENERGY USE
dc.subjectCONSUMPTION OF ENERGY
dc.subjectMARKET
dc.subjectNET OIL
dc.subjectNUCLEAR ENERGY
dc.subjectENERGY PRICES
dc.subjectCOFFEE PRICES
dc.subjectENERGY PRODUCTION
dc.subjectCRUDE OIL PRICE
dc.subjectNATURAL GAS
dc.subjectMARKET SHARE
dc.subjectFEEDSTOCK
dc.subjectFINANCIAL MARKET
dc.subjectSUGARCANE
dc.subjectSTOCKS
dc.subjectOIL EXPORTERS
dc.subjectDOMESTIC OIL PRODUCTION
dc.subjectINVESTMENT
dc.subjectNITROGEN
dc.subjectCOAL
dc.subjectFINANCIAL MARKETS
dc.subjectSUPPLY
dc.subjectCRUDE OIL
dc.subjectFUEL
dc.subjectOIL SHOCKS
dc.subjectDRILLING
dc.subjectPRICES OF ENERGY
dc.subjectAVAILABILITY
dc.subjectOIL PRICE SPIKE
dc.subjectINVESTMENTS
dc.subjectDOMESTIC PETROLEUM
dc.subjectRENEWABLE ENERGY
dc.subjectSUPPLIERS
dc.subjectPRICE SPIKES
dc.subjectLABOR MARKETS
dc.subjectDIESEL
dc.subjectCOMMODITY PRICES
dc.subjectOIL INDUSTRY
dc.subjectENERGY COSTS
dc.subjectFOSSIL
dc.subjectPRICES
dc.subjectAPPROACH
dc.subjectELECTRICAL POWER
dc.subjectENERGY
dc.titleThe Great Plunge in Oil Pricesen
dc.title.subtitleCauses, Consequences, and Policy Responsesen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.date.disclosure2015-12-10
okr.date.doiregistration2025-05-05T12:17:21.097452Z
okr.doctypePublications & Research::Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/2015/12/25666189/great-plunge-oil-prices-causes-consequences-policy-responses
okr.guid726831468180852545
okr.identifier.externaldocumentum090224b083c49a57_1_0
okr.identifier.internaldocumentum25666189
okr.identifier.report94725
okr.importedtrue
okr.language.supporteden
okr.pdfurlhttp://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/12/11/090224b083c49a57/1_0/Rendered/PDF/The0great0plun0and0policy0responses.pdfen
okr.topicEnergy::Oil & Gas
okr.topicEnergy::Energy Policies & Economics
okr.topicMacroeconomics and Economic Growth::Business Cycles and Stabilization Policies
okr.topicEnergy::Energy Production and Transportation
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.unitDevelopment Prospects Group (DECPG)
relation.isAuthorOfPublication18b25906-9cb0-519d-95a9-8bfd4c5a3666
relation.isAuthorOfPublicationac9fefe8-9d4d-555d-bb68-f056fd7a3790
relation.isAuthorOfPublication5807995a-9e0a-5d56-b622-d4d19e723613
relation.isAuthorOfPublication.latestForDiscovery18b25906-9cb0-519d-95a9-8bfd4c5a3666
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