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Oil production in the lower 48 states increased more than ten-fold between 1900 and 1970, but the real price of oil barely increased. Perhaps then it is not so important to dampen the increase in the real price of oil in boom times, or moderate the decline in down times, as the PEP proposal is designed to do? time-series data for petroleum consumption, the real price of oil, and real GNP, Jones ends up with an apparently well-specified restricted model containing only seven parameters, and with economically plausible estimates of short- and long-run price and income elasticities. |
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