New Constraints in Absorptive Capacity and the Optimum Rate of Petroleum Output

摘要

Economic policy in four oil-producing countries is analyzed within a framework that combines a qualitative assessment of the policy-making process with an empirical formulation based on historical and current trends in these countries. The concept of absorptive capacity is used to analyze the optimum rates of petroleum production in Iran, Iraq, Saudi Arabia, and Kuwait. A control solution with an econometric model is developed which is then modified for alternative development strategies based on analysis of factors influencing production decisions. The study shows the consistencies and inconsistencies between the goals of economic growth, oil production, and exports, and the constraints on economic development. Simulation experiments incorporated a number of the constraints on absorptive capacity. Impact of other constraints such as income distribution and political stability is considered qualitatively. (ERA citation 08:005388)