Energy policy and oil prices : system dynamics approach to modeling oil market

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Global Commerce Forum
The pattern of global oil demand, real oil price, and world economy in the future is studied through system dynamics modeling. Based on the simulation, the oil demand will drop and then gradually recover while the real oil price will be stable and then drop mimicking a sigmoid curve. The economy will continuously increase. If an economic stimulus policy is implemented, the oil demand is expected to have a shallower drop. Thus, the real oil price is likely to be an S-shaped curve with a higher value, and the economy is expected to grow faster as compared to the case when there is no stimulus policy.
Version of Record
A version of this paper was presented in the 2nd Annual International Conference on Global Commerce, Las Vegas, NV during October 22-24, 2009.