Energy and Growth under Flexible Exchange Rates: A Simulation Study
AbstractThis paper offers a theoretical framework for studying the inter-actions 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0582.
Date of creation: Nov 1980
Date of revision:
Publication status: published as Sachs, Jeffrey. "Energy and Growth under Flexible Exchange Rates: A Simulation Study." Economic Interdependence and Flexible Exchange Rates, edited by J. S. Bhandari and B. H. Putnam, pp. 191-220. Cambridge: MIT Press, 1983.
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- Laurence J. Kotlikoff & Edward E. Leamer & Jeffrey Sachs, 1981. "The International Economics of Transitional Growth: The Case of the United States," NBER Working Papers 0773, National Bureau of Economic Research, Inc.
- Helliwell, John F. & Padmore, Tim, 1985.
"Empirical studies of macroeconomic interdependence,"
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in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 2, chapter 21, pages 1107-1151
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