Seyed Mohammad Shahab Tabatabaee Atabak; Teymour Mohammadi; Morteza Khorsandi
Abstract
Market power refers to the ability to affecting to the market. The firm has a pricing power in the monopoly market. One of the types of monopolies is the cartel. Two important features of behavior in form of the cartel are the impact on the amount of production and price. In terms of production, the ...
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Market power refers to the ability to affecting to the market. The firm has a pricing power in the monopoly market. One of the types of monopolies is the cartel. Two important features of behavior in form of the cartel are the impact on the amount of production and price. In terms of production, the cartel controls the production through coordination among the members, and in terms of impact on prices, it affects the price of the market by controlling production. In this study, to investigate the market power of OPEC, this issue will be discussed that whether OPEC acts as a cartel, or not? Therefore, to measure the market power of OPEC, The behavior and coordination of OPEC members’ production decisions are being studied. The research hypotheses are as follows, there is coordination in behavior and production decisions between the production of OPEC and the production of OPEC members, and total production of OPEC determines oil prices in the global oil markets. To prove the first hypothesis, used ARDL bounds testing approach of co-integration, and for the second hypothesis, used Toda-Yamamoto tests. The data used in this study includes the production of OPEC members, global oil prices (Brent, Dubai and WTI), in the period of 1994-2016, quarterly and monthly and 1980-2016, annual. The results indicates that there is no long-term relationship between the production of OPEC members and total production of OPEC, also causality from oil prices to OPEC production, also the direction of causality is from oil prices to OPEC production.
Teymoor Mohammadi; Azadeh Bordbar; Alireza Daghighi Asli
Volume 1, Issue 3 , July 2012, , Pages 107-129
Abstract
This study investigates interactions between economic growth and natural gas consumption, using times series data. The paper uses vector error correction technique and Johansen Co-integration test for the period 1353-1386. Co-integration test results indicate that there are two co-integrating ...
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This study investigates interactions between economic growth and natural gas consumption, using times series data. The paper uses vector error correction technique and Johansen Co-integration test for the period 1353-1386. Co-integration test results indicate that there are two co-integrating vectors containing GDP and natural gas consumption. In order to identify the co-integrating vectors, restrictions based on fundamentals of economic theory are imposed. Each vector can be interpreted as follows: in cointegrating equation1, gas consumption, capital, research & development and labor force variables have positive and significant effects on GDP (endogenous growth function) in the long run, based on theoretical foundations of endogenous growth function is quite plausible. In cointegrating equation 2, GDP has positive and significant effect on gas consumption in the long run. Also, there are short-term dynamics in ECM equations in which speed of adjustment coefficients are offered. The results indicate that there is bidirectional causality between gas consumption and GDP in Iranian economy. So myiopic policies on one side without considering the other side is not expected to be effective. This means that policies designed for restraining gas consumption policy, ceteris paribus, may lead to decline in GDP.
