Energy and Growth Under Flexible Exchange Rates: A Simulation Study
- Energy and Growth Under Flexible Exchange Rates: A Simulation Study
- Sachs, Jeffrey D.
- Working papers
- Earth Institute
International and Public Affairs
Health Policy and Management
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- Part Number:
- National Bureau of Economic Research
- Publisher Location:
- Cambridge, Mass.
- 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.
- Economic theory
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- Suggested Citation:
- Jeffrey D. Sachs, 1980, Energy and Growth Under Flexible Exchange Rates: A Simulation Study, Columbia University Academic Commons, http://hdl.handle.net/10022/AC:P:8221.