The Unassuming Economist

With oil prices back above $100 a barrel, declarations of “energy independence” are back in the news. But a more reliable path to energy security lies in continuing to depend on the benefits conferred by global energy markets, while reducing reliance on any one form of energy or on any one energy supplier. And indeed, since the oil shocks of the 1970s, the actions of millions of consumers and producers have enhanced energy security in precisely this way. Read the full story on the USAEE (United States Association for Energy Economics) site.

Noted economist Menzie Chinn blogs on whether reduced dependence on imported energy is a worthwhile objective. Chinn and Jim Hamliton, another famous economist, run Econbrowser, which made Time magazine’s list of the Top 25  financial & economic blogs.

Oil prices are likely to remain high for the foreseeable future, and IMF economists say that governments should be looking to back sustainable alternative sources of energy. IMF analysis released as part of its World Economic Outlook says improvements in oil supply have been slow.

As the price of oil broke through $100 a barrel recently, economists have started whispering the dreaded R word – recession. The last five oil shocks – 1973-74 Arab oil embargo; 1978-79 Iranian Revolution; 1980s Iran-Iraq war; 1990-91 Gulf War and the oil spike of 2007-08 – all triggered global recessions. To continue reading, see the recent article by China Daily.

Improvements in energy diversification for OECD nations – a key determinant of energy security – are mostly attributable to the increased importance of natural gas as an energy source, a recent IMF working paper reveals. To read more, see the commercial climate’s Blog article on the paper.