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Abstract

This paper investigates the intergenerational welfare impact of raising state administered retail energy prices in Saudi Arabia, an example of an oil exporting country with a fast growing population. To achieve this, we develop a dynamic model with overlapping generations (called MEGIR-SA), which we believe is the first empirical application of its type to be developed for an oil exporting country.

The model is used to analyze the effects of the increase in some Saudi administered energy prices implemented at the end of December 2015.

In particular, the model analyzes how these price increases might affect the welfare of Saudis through a direct increase in energy expenditures, an indirect rise in Saudi public income stemming from a lower domestic demand for oil that fosters oil exports at a given level of domestic oil production, and a direct increase of the turnover of the energy sector.

The analysis suggests that the increase in end-user energy prices results in a net overall favorable effect on the intertemporal welfare of all households.

https://www.iaee.org/en/publications/ejarticle.aspx?id=3355

Energy Journal

Authors

FG

Frederic Gonand

Fakhri Hasanov

Research Fellow Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor… Fakhri is a research fellow leading the KAPSARC Global Energy Macroeconometric Model (KGEMM) project. Previously, he was an associate professor and director of the Center for Socio-Economic Research at Qafqaz University, Azerbaijan. He has served as a deputy director of the Research Institute at the Ministry of Economic Development, and a senior economist at the Research Department of the Central Bank of Azerbaijan Republic. He received a Fulbright Post-Doctoral Scholarship and conducted a research on building and applying a macroeconometric model for policy analysis at the George Washington University. Fakhri is a member of the research program on forecasting at the George Washington University and the editorial board of the Asian Journal of Business and Management Sciences. His research interests and experience span econometric modeling and forecasting, building and applying macroeconometric models for policy purposes, energy economics with a particular focus on natural resource-rich countries.

Expertise

  • Applied macroeconometrics
  • Energy economics
  • Time series modeling and forecasting

Publications See all Fakhri Hasanov’s publications

Lester C. Hunt

Visiting Researcher Lester C. Hunt is a part-time Professor of Economics at the University of Portsmouth and a KAPSARC Visiting Researcher. Lester… Lester C. Hunt is a part-time Professor of Economics at the University of Portsmouth and a KAPSARC Visiting Researcher. Lester previously worked at the Universities of Essex (1979-1980), Swansea (1980-1985 and 1987-1989), Surrey (1989-1991 and 1999-2017), and Portsmouth (1994-1998, and 2017 onwards). At Surrey he was Head of Economics (1999-2003) and Director of SEEC (2003-2015). At Portsmouth he was Head of Economics (1996 -1998) and Head of Economics and Finance (2017-2021). In addition to working in higher education, Lester was an Economic Adviser in the forecasting division of HM Treasury (1985-1987), an Energy Analyst/Economist at Midlands Electricity (1991-1994) and a Senior Research Fellow at KAPSARC (2015-2017). Lester holds a B.Sc. (Hons) in Economics with Econometrics from Loughborough University, an MA in Economics from the University of Essex, and a Ph.D. in Economics from the University of Surrey. He has been an Editor of The Energy Journal since 2006.

Expertise

  • Energy Economics and Policy

Publications See all Lester C. Hunt’s publications

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