Guest Posted February 27, 2015 Report Share Posted February 27, 2015 If the oil price keeps falling, will oil exporter countries bankrupt ? Assume that the government will not take any action for the deflation incurred by the falling in oil price. Reply Link to post Share on other sites More sharing options...
EconDaddy Posted February 27, 2015 Report Share Posted February 27, 2015 No they won't. Their export revenues might get hurt indeed, but it is hardly unlikely that any of them would default. Reply Link to post Share on other sites More sharing options...
Guest Posted February 27, 2015 Report Share Posted February 27, 2015 No they won't. Their export revenues might get hurt indeed, but it is hardly unlikely that any of them would default.maybe not necessarily bankrupt, but would it incur serious recession and deflation ? Reply Link to post Share on other sites More sharing options...
EconDaddy Posted February 27, 2015 Report Share Posted February 27, 2015 It might add to factors which lead to recession (e.g. in the case of Russia), but why would it lead to deflation? Just look at Russian inflation. Reply Link to post Share on other sites More sharing options...
Guest Posted February 27, 2015 Report Share Posted February 27, 2015 (edited) It might add to factors which lead to recession (e.g. in the case of Russia), but why would it lead to deflation? Just look at Russian inflation.Oh, I thought It would decrease the AD and increase the Short run supply curve as the fall in oil price reduces both consumer's and producer's confidence, thus an inward shift for AD, but it lowers the cost of production , so supply curve shifts to the right, Thus overall, there will be a dramatic decrease in piece level which is deflation. It is what I thought ........ Please do correct me if i am wrong. Edited February 27, 2015 by Guest Reply Link to post Share on other sites More sharing options...
Tom Hiddleston Posted February 27, 2015 Report Share Posted February 27, 2015 Or they could just export more to keep up with the revenue intake of before. Reply Link to post Share on other sites More sharing options...
King112 Posted February 28, 2015 Report Share Posted February 28, 2015 or they could pull something new out of their hat. Eg- Saudi could say, until you pay XYZ amount, we wont sell oil to you. something like that? Reply Link to post Share on other sites More sharing options...
Guest Posted February 28, 2015 Report Share Posted February 28, 2015 (edited) or they could pull something new out of their hat. Eg- Saudi could say, until you pay XYZ amount, we wont sell oil to you. something like that?But if the government don't do anything, they will be facing both recession and deflation?? Edited February 28, 2015 by Guest Reply Link to post Share on other sites More sharing options...
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