Regulation from the oil price to see the limitations of economic models

 In recent years, international crude oil prices really makes a ups and downs, thrilling.
Factors promoting the international crude oil price fluctuations voices from the debate: geopolitics, OPEC limited production, depreciation of the dollar, idle speculation, demand growth in developing countries hh, factors many, many arguments, but the result was one: the overall price increases, and fluctuations of uncertainty. from the European market, crude oil spot price chart shows that since August 2006 to August 2008 of three years, crude oil prices rose very differential rate reached 244%.
the core principles of the controversy surrounding one of the basic theory of economics, the demand supply model m. as shown:
demand is a decreasing function of price, the lower the price, demand is greater. the demand curve in the figure has a distinct feature D, which is tilted to the right, that its slope is negative, indicating the demand for and prices of goods between the change in the opposite direction into the relationship. < br> supply is an increasing function of price, the higher the price, supply will be. The supply curve in the figure S has an obvious feature, it is tilted to the right, that its slope is positive, that goods between supply and price changes in the same direction as the relationship.
then, the price is how to determine it? economics of commodity prices is the equilibrium price of goods. goods, the equilibrium price in the commodities market demand and the market supply of these two opposing forces formed under the interaction. When the same amount of demand and supply, that demand curve D and supply curve S intersect at point E, the formation of the equilibrium price, equilibrium quantity number at this time.
for non-scarce goods, and in the full market economy, demand - supply model is justifiable. but in terms of oil on the world, has long been a scarce resource oligopoly, and in a non-full market economy, coupled with fueled by other factors, demand - supply model theory can not fully adjust the price of oil, or this regulation is a regulation of trifles, as a scarce resource, demand is the key to regulation, the price is regulated means, especially in the country.
fluctuations in oil prices, affecting the foundation of our national economy, as the seventies of the former Soviet Union, the Western powers with the means to suppress the price of oil, shake the economic foundation of the former Soviet Union, Thus, the collapse of the former Soviet state system. risk management to risk such a definition: the biggest risk. oil prices our economy is so based on.
face the risk of how to deal with?
crude oil prices are running a market economy with international standards, while the refined oil pricing, but firmly in control at the national Development and Reform Commission in the hands, every time the price adjustment, and government monopolies are the result of game. led the government raised prices of refined oil in, it is necessary to the relevant areas to the corresponding financial subsidies; does not meet the proposed monopoly price increase request , it is necessary to give a monopoly to two huge financial subsidies embarrassment of being beaten. (such as Sinopec received 15.0 billion has been accumulated financial subsidies this year, and not less than 100 billion will also receive financial subsidies). this still holds partly cover surface control mechanism is true reflection of the socialist market economy, namely: the market in a planned program in the market, or that the non-market economy nor a planned economy.
Since the invisible hand of market economy and social socialist market economy, planning + market control means, do not really solve the problem of price regulation, then, are there any other solution to this complex problem then?
I believe that my country is concerned, we must first clear understanding of geopolitics, OPEC limited production, depreciation of the dollar, idle speculation, etc. The problem is our inability to led; total demand growth in developing countries, we can only hope to control some of their own needs, can consider the focus of regulation to a demand from the price control regulation, the use of the planned economy China has experience of hierarchical control in the country oil demand, the amount of out and out of the combination of the amount of income, meet the people's livelihood in the context of total demand, constraints and reduced consumer demand. by way of the approved limit of oil-vote government, enterprises, individuals refined oil consumption, so that the share index of the oil, oil oil exchange votes, in turn, oil votes became the next period of Statistics demand basis, again and again, gradually refined into the planned orbit of oil consumption, combined with price controls, energy efficiency and limit the use of line and other combination of boxing, so that now the two Government to get rid of the passive situation of being beaten. At the same time in accordance with international oil prices Change, its capability to adjust the national pool of oil reserves at this price.
regulation by domestic refined oil prices can be seen the results of any economic model has its limitations, in contrast, the market economy to meet the needs of social material wealth, has stimulated interest groups and individuals the unlimited greed and selfishness of evil, leading to the invisible hand in the allocation of scarce resources, a point in time have little effect; planned economy to reduce the speed of economic development, decision making and increased risk of various interest groups inert clusters, but in the face of complex contradictions, especially in the allocation of scarce resources are playing an irreplaceable role.
sum up, no good or bad economic model, each the limitations of its historical and modern, but also have their own adaptation of the environment and good at solving problems. and diversity, coexistence, pluralism will become the world's cultural, political and economic in the normal, can use the flexible and skilled manipulation modes, will be the key to assessing the capacity of Governments.