This article examines Granger causality between oil prices and drilling activity by applying Hsiao's version of the Granger causality method with the aid of cointegration and error-correction modeling to U.S. data for the period 1949–1995. The results of this study indicate that there is no causal relationship between oil prices and oil wells drilled in the short run. Yet, oil prices are found to Granger-cause oil wells drilled in the long run.

Oil prices and drilling activity in the united states : An application of cointegration and error-correction modeling

Energy tariffs in a small open economy

A tariff on imported energy in a small open economy alters production, redistributes income, and generates tariff revenue. The present paper includes tariff revenue in a general equilibrium economy producing two traded goods with imported energy and domestic capital and labor. An energy tariff reduces energy intensive output and domestic factor income but payment to one domestic factor may rise as might the other output. Tariff revenue, not included in the related theoretical literature, is shown to be concave in the tariff. A simulation illustrates these general equilibrium properties including the revenue maximizing tariff.

Clifton T. Jones

Papers

An oil import fee and drilling activity in the USA