Antonio Fatas
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antoniofatas.bsky.social
Antonio Fatas
@antoniofatas.bsky.social
2.8K followers 790 following 2.8K posts

Professor of Economics at INSEAD, Vice President CEPR and Editor in Chief VoxEU. Interested in global macroeconomic issues.

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Economics 92%
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Reposted by Antonio Fatás

voxeu.org
VoxEU @ CEPR @voxeu.org · 2d
L Kilian & K Patel use the 2026 Iran war as a natural experiment to estimate the price elasticity of US shale oil supply. The monthly & quarterly elasticities are effectively zero, providing indirect support for the view that oil prices are driven by demand shocks.
cepr.org/voxeu/column...
#EconSky
Figure: WTI futures curve, 31 March 2026 The 2026 Iran war provides a natural experiment that allows model-free estimation of the price elasticity of US shale oil supply. This column argues that the monthly and quarterly elasticities are effectively zero. This finding is supported by data on well completion times, survey data, and economic theory. The analysis contradicts higher oil supply elasticity estimates from recently proposed non-standard panel regression specifications, which attribute the supply response to shale oil producers strategically reducing inventories of drilled but uncompleted wells. The findings provide indirect support for the view that oil prices are mainly driven by demand, rather than supply, shocks.

Reposted by Antonio Fatás

voxeu.org
VoxEU @ CEPR @voxeu.org · 2d
In countries where intellectual property protections are weak, firms may instead turn to contractual exclusivity by limiting the number of manufacturers their suppliers can serve, reducing the suppliers' customer base and bargaining power.
cepr.org/voxeu/column...
#EconSky
Figure: Each dot is a country. The weaker its legal protection for trade secrets, the higher the share of car-parts contracts in that country that are exclusive. Modern manufacturing often requires firms to share confidential information with outside suppliers, some of whom also supply their competitors. Using more than 160,000 contracts from the global automotive industry, this column examines how manufacturers respond to this risk and the costs of doing so. The findings suggest that when legal protection is weak, firms may instead turn to contractual exclusivity by limiting the number of manufacturers their suppliers can serve, reducing the suppliers’ customer base and bargaining power and potentially weakening their incentives to invest. Stronger legal protection reduces the need for this contractual response and can therefore support broader supplier networks.