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Lower World Energy Prices: Good News or Bad News?

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Author Info
David F. Burgess

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Abstract

Lower world energy prices may reduce the overall rate of return to capital and slow down the rate of capital formation and GDP growth in a new energy-importing economy even if capital and energy are complementary inputs in 95 percent or more of the economy that uses energy as an input. Whether the economy is a net energy importer or exporter, lower world energy prices will increase the sustainable real income of the representative citizen if energy-specific resources are privately owned.

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Publisher Info
Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 22 (1989)
Issue (Month): 3 (August)
Pages: 487-502
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Handle: RePEc:cje:issued:v:22:y:1989:i:3:p:487-502

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  1. Kul B. Bhatia, 1999. "Tax Incidence with Three Goods and Two Primary Factors: Theory and Applications," UWO Department of Economics Working Papers 9914, University of Western Ontario, Department of Economics. [Downloadable!]
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