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Energy and Growth Under Flexible Exchange Rates: A Simulation Study

Jeffrey D. Sachs

Title:
Energy and Growth Under Flexible Exchange Rates: A Simulation Study
Author(s):
Sachs, Jeffrey D.
Date:
Type:
Working papers
Department:
Earth Institute
Permanent URL:
Part Number:
582
Publisher:
National Bureau of Economic Research
Publisher Location:
Cambridge, Mass.
Abstract:
This paper offers a theoretical framework for studying the interactions of energy prices and economic growth. The incorporation of energy prices and quantities in a macroeconomic setting focuses on (1) the aggregate technology; (2) the interdependence of energy producers and consumers in the world economy; and (3) the asset markets as the channel through which energy price changes affect output and capital accumulation. While several existing studies consider aspects of these issues, none provides a synthesis. In this analysis, a theoretically sound model of an oil price increase in the world economy is presented, carefully treating topics (1) - (3). The model is solved with computer simulation, as it is far too complex to yield analytical solutions.
Subject(s):
Economic theory
Energy
Item views:
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Metadata:
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