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What determines the output drop after an energy price increase: Household or firm energy share?

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  • Dhawan, Rajeev
  • Jeske, Karsten

Abstract

We investigate a DSGE economy's response to energy price hikes for changing firm and household energy shares over the 1970-2005 period. Simulation results indicate that the economy's output response is mainly determined by the firm rather than the household share.

Suggested Citation

  • Dhawan, Rajeev & Jeske, Karsten, 2008. "What determines the output drop after an energy price increase: Household or firm energy share?," Economics Letters, Elsevier, vol. 101(3), pages 202-205, December.
    • Handle: RePEc:eee:ecolet:v:101:y:2008:i:3:p:202-205
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    1. Dhawan, Rajeev & Jeske, Karsten, 2008. "What determines the output drop after an energy price increase: Household or firm energy share?," Economics Letters, Elsevier, vol. 101(3), pages 202-205, December.
    2. Collard, Fabrice & Juillard, Michel, 2001. "Accuracy of stochastic perturbation methods: The case of asset pricing models," Journal of Economic Dynamics and Control, Elsevier, vol. 25(6-7), pages 979-999, June.
    3. Rajeev Dhawan & Karsten Jeske, 2008. "Energy Price Shocks and the Macroeconomy: The Role of Consumer Durables," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1357-1377, October.
    4. Karsten Jeske & Rajeev Dhawan, 2006. "Energy and the Macroeconomy: The Role of Consumer Durables," 2006 Meeting Papers 719, Society for Economic Dynamics.
    5. Kim, In-Moo & Loungani, Prakash, 1992. "The role of energy in real business cycle models," Journal of Monetary Economics, Elsevier, vol. 29(2), pages 173-189, April.
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    Cited by:

    1. Rajeev Dhawan & Karsten Jeske & Pedro Silos, 2010. "Productivity, Energy Prices and the Great Moderation: A New Link," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 715-724, July.
    2. Christiane Baumeister & Lutz Kilian & Xiaoqing Zhou, 2017. "Is the Discretionary Income Effect of Oil Price Shocks a Hoax?," Staff Working Papers 17-50, Bank of Canada.
    3. Dhawan, Rajeev & Jeske, Karsten, 2008. "What determines the output drop after an energy price increase: Household or firm energy share?," Economics Letters, Elsevier, vol. 101(3), pages 202-205, December.
    4. Rajeev Dhawan & Karsten Jeske, 2008. "Energy Price Shocks and the Macroeconomy: The Role of Consumer Durables," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(7), pages 1357-1377, October.

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