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The Dollar Crisis, Oil Prices, and Foreign Exchange Risks: The Case for a Basket of Currencies as Numeraire

Published online by Cambridge University Press:  29 January 2009

Hazem El-Beblawi
Affiliation:
University of AlexandriaAlexandria, Egypt

Extract

Since the quadrupling of oil prices in 1973–74, OPEC and oil prices have made front-page news and captured the public imagination. It is no secret that oil prices are administered prices, where an economic agent is a price maker; other participants in the market have to adjust their behavior to this price. It is not a new phenomenon. From its early history, the oil industry in the United States — by far the world's first oil province — was dominated by the Standard Oil Trust. On the international scene, the role of the Seven Sisters hardly needs mention. They continued to control oil export prices until the 1960s.

Type
Research Article
Copyright
Copyright © Cambridge University Press 1980

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References

NOTES

1 Mabro, Robert, “The Price of Oil: Problems of Its Administration,” OPEC Review, June, 1978.Google Scholar

2 Wyant, Frank R., The United States, OPEC and Multinational Oil (Lexington Books, 1977).Google Scholar

3 Relationships between Oil Companies and OPEC,” General Accounting Office, Report to the Congress, U.S.A., January, 1978.Google Scholar

4 It has been suggested, by OPEC Secretariat studies, that OPEC's foreign assets denominated in dollars amounted to about $96 billion at the end of 1977.Google Scholar