Illig, Aude and Schindler, Ian (2017) Oil extraction, economic growth, and oil price dynamics. Biophysical Economics and Sustainability, vol. 2 (n° 1). pp. 1-17.

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Abstract

We use economic production function theory and an empirical model of oil prices based only on oil extraction data to analyze the dynamics of the economy and oil prices as we transition into the contraction phase of oil extraction. We explore the implications with respect to several common scenarios. We find that price feedback cycles which lead to increased production during the growth phase of oil extraction go into reverse in the contraction phase of oil extraction speeding decline.