Abstract

FONSECA ROCHA, Karla  and  GOMEZ LOPEZ, Claudia S.. Dynamics of oil in Mexico. A two-sector model. EconoQuantum [online]. 2015, vol.12, n.2, pp.109-135. ISSN 2007-9869.

This paper analyzes a monopoly firm that extracts a non renewable resource (oil) and faces two markets: domestic and international. We use mexican empirical evidence regarding the three mexican crude oil types (Maya, Istmo y Olmeca) available at the mexican market. We use Fischer and Laxminayaran (2004) model and modify it to the mexican economy which is characterized by two markets and three commodities (crude oil) types. Our main results are: (i) the Maya commodity type is the most competitive in prices and exports; (ii) prices are more volatile than real variables in the mexican petroleum market; (iii) Istmo and Olmeca mexican commodities are more inelastic, so an increase in price decreases the quantity for the international market; (iv) we find complementarities and also substitution relationships between the oil mexican crude oil commodities in some special cases and, finally, (v) Fischer and Laxminayaran results are applicable to the mexican economy.

Keywords : oil; elasticities; monopoly; business cycles.

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