Intermediate Macroeconomics - Essay Example

These countries include the United States, Russia, China, Canada, Venezuela, Nigeria and Libya among others. Today, the economic structures of these countries are dependent on crude oil, as the primary source of energy.Ordinarilly; the oil plays a significant role in the strength and stability of these economies. Oil influences global consumption and expenditure rates through international trade to a substantial extent. . (Bernanke & Gertler 1995) The time under consideration in this research paper is between 2004 and 2013.

During the period, Libya and other Arab countries underwent a revolution that caused disruptions in crude oil mining. The troubled oil production fronted a resurgence of demand for the product and hence the situation sharply sent the oil costs up. During the period, economists believe that disrupted production in various Arab countries contributed to the slow growth for 2011 henceforth. The messy markets over the last few years saw oil prices fluctuate making it hard to predict the economy The demand for crude oil is rapidly increasing with the growing industrialization in developing countries.

This is because the calorific value of crude oil is very higher as compared to that of the other alternative sources of energy such as solar energy, bio-fuel, and other sources of energy. (Bernanke & Gertler 1995) Moreover, the other alternative sources of energy are not feasible to be used in some of the industries and vehicles. These competitive benefits of crude oil over the other alternatives create the aggregate demand of the precious natural resource. However, this natural resource is continue to deplete at a similar pace to that of increasing demand due to the over exploitation of the same.

In addition, as crude oil is a non-renewable source of energy, hence it cannot be replenished after the complete use of the same. This has resulted in the constant price