Title:

Energy and Growth Under Flexible Exchange Rates: A Simulation Study

Author(s):

Sachs, Jeffrey D.

Date:

1980

Type:

Working papers

Department:

Earth Institute

Permanent URL:

http://hdl.handle.net/10022/AC:P:8221

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:

231

Metadata:

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