Use this URL to cite or link to this record in EThOS:
Title: An empirical investigation into the OPEC surplus and its disposal
Author: O'Neill, J.
ISNI:       0000 0001 3453 5503
Awarding Body: University of Surrey
Current Institution: University of Surrey
Date of Award: 1982
Availability of Full Text:
Access from EThOS:
Access from Institution:
Since 1973, the price of oil has increased from $2.70 to $34 per barrel in November 1981. Due to the limited absorptive capacity of some of the OPEC countries, a large current account surplus accrued to the OPEC group. Many economists have expressed views about the significance of the surplus and its disposal, and have proposed methods to remove the surplus or to improve the efficiency of the 'recycling' of the surplus. This thesis provides an empirical investigation of the OPEC surplus and its disposal, in an attempt to both shed some light on the importance of the surplus, and to give some indication of its likely size and the pattern of its disposal in the future. A macroeconomic model is developed to examine the OPEC economies empirically from which equations are estimated using both normal time series analysis and a pooled sample of time series and cross section data. However, for the purposes of forecasting the surplus in the future, it is concluded that an econometric model has limited usefulness due to the instability of the relationships between variables over the time period considered. A two stage decision model based on the theory of portfolio selection is developed to empirically explore the disposal of the OPEC surplus. The estimated results suggest that OPEC investors have chosen their asset holdings on a rather ad-hoc basis with little importance being attached to the relative rate of return available on alternative assets. Investors have preferred to adjust asset holdings mainly in response to exchange rate expectations and have diversified their portfolios over time irrespective of normal economic criteria. Consequently, the future pattern of the disposal of the surplus is may be a similar basis, and therefore, any mechanism to improve the efficiency of the recycling mechanisism. based on economic theory, is unlikely to be successful.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available
Keywords: Energy and power, general