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The Social Cost of Imported Oil

Structural adjustments in the economy and an increase in uncertainty about future oil prices followed the two oil price shocks of the 1970s and suggested that continued dependence on imported oil was costly. It was argued that private decisions to consume imported oil did not appropriately take into account the country's vulnerability to oil exporters. Accordingly, a literature developed around the idea that the market price of imported oil does not reflect the full social cost.

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Energy Specializations: Petroleum – Policy and Regulation

JEL Codes:
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Imported oil, Social costs, Oil price shocks, Structural adjustments

DOI: 10.5547/ISSN0195-6574-EJ-Vol5-No3-4

Published in Volume 5, Number 3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.