Putty-clay capital and energy
AbstractWe evaluate the ability of models with putty-clay capital and stochastic energy prices to account for the dynamics of energy use and output. Economists have noted a close relationship between changes in the price of energy and changes in output. Moreover, they have documents that this relationship is asymmetric: energy price increases are associated with large output charges while energy prices decreases are associated with small output changes. Finally, following energy price changes, energy use adjusts slowly over time. Standard models with putty-putty capital fail to reproduce the features of the data. In our study of putty-clay models, we first develop a simple characterization of equilibrium. We apply these results to solve a prototype model. Preliminary results suggest that models with putty-clay capital improve on putty-putty models in accounting for the data.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of Minneapolis in its series Working Papers with number 548.
Date of creation: 1995
Date of revision:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Simon Gilchrist & John Williams, 1998. "Investment, capacity, and output: a putty-clay approach," Finance and Economics Discussion Series 1998-44, Board of Governors of the Federal Reserve System (U.S.).
- Steven J. Davis & John Haltiwanger, 1999.
"Sectoral Job Creation and Destruction Responses to Oil Price Changes,"
NBER Working Papers
7095, National Bureau of Economic Research, Inc.
- Davis, Steven J. & Haltiwanger, John, 2001. "Sectoral job creation and destruction responses to oil price changes," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 465-512, December.
- David K. Backus & Mario J. Crucini, 1998.
"Oil Prices and the Terms of Trade,"
NBER Working Papers
6697, National Bureau of Economic Research, Inc.
- Simon Gilchrist & John C. Williams, 1998.
"Putty-clay and investment: a business cycle analysis,"
Finance and Economics Discussion Series
1998-30, Board of Governors of the Federal Reserve System (U.S.).
- Simon Gilchrist & John C. Williams, 2000. "Putty-Clay and Investment: A Business Cycle Analysis," Journal of Political Economy, University of Chicago Press, vol. 108(5), pages 928-960, October.
- Simon Gilchrist & John C. Williams, 1998. "Putty-Clay and Investment: A Business Cycle Analysis," NBER Working Papers 6812, National Bureau of Economic Research, Inc.
- Ben Hunt, 2005. "Oil Price Shocks: Can They Account for the Stagflation in the 1970s?," IMF Working Papers 05/215, International Monetary Fund.
- David R. Stockman, 2006. "Oil Shocks and Macroeconomic Activity: A Putty-Clay Perspective," Working Papers 06-15, University of Delaware, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Janelle Ruswick).
If references are entirely missing, you can add them using this form.