A Note on Rowen and Weyant,"Reducing the Economic Impacts of Oil Supply Interruptions: An International Perspective"

Abstract

Henry Rowen and John Weyant (1982) commit the classic error of trying to answer an important policy question with tools that do not fit the job. Nor does their care in attaching explicit caveats to their conclusions overcome the fact that the limitations of their approach are serious. The question of oil supply disruptions and their potential economic impact is indeed important, and it remains so despite slack oil markets. Policymakers may yet be faced with situations that require them to decide quickly on the advisability of emergency tariffs and other such measures; and they will need reasonable assurances that the caveats analysts attach to policy recommendations do not overwhelm the recommendations themselves. Just such a danger is inherent in the inappropriate application of models and the application of inappropriate models.

Keywords

Oil supply shocks Energy policy Tariffs Energy modeling

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