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A General Equilibrium Appraisal of Energy Policy in Mexico

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  • T. J. Kehoe
  • J. Serra-Puche

Abstract

This paper develops a static neoclassical general equilibrium model of the Mexican economy that focuses on production, consumption, and exports of energy goods. The specificatin of the model allows the government to set prices and production levels of energy goods exogenously. Domestic prices differ from international prices, and net exports of these goods are determined residually. The level of energy exports is a major factor in the determination of the government and trade deficits. The analysis presented in this paper serves as a case study of how to design and use an applied general equilibrium model to do policy analysis. An interesting feature is that the model itself is used to determine one of the key parameters, the elasticity of substitution of non- energy imports for domestic goods.
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Suggested Citation

  • T. J. Kehoe & J. Serra-Puche, 1983. "A General Equilibrium Appraisal of Energy Policy in Mexico," Working papers 321, Massachusetts Institute of Technology (MIT), Department of Economics.
  • Handle: RePEc:mit:worpap:321
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    Cited by:

    1. Gaspar Núñez Rodríguez & Clemente Polo Andrés, 2008. "An applied general equilibrium analysis of fiscal reforms to fight poverty in Mexico," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 81-115, May.
    2. Timothy J. Kehoe, 1996. "Social accounting matrices and applied general equilibrium models," Working Papers 563, Federal Reserve Bank of Minneapolis.
    3. World Bank, 2002. "Romania - Building Institutions for Public Expenditure Management : Reforms, Efficiency and Equity - A Public Expenditure and Institutions Review," World Bank Other Operational Studies 15371, The World Bank.
    4. Gaspar Núñez Rodríguez, 2015. "Modelo de equilibrio general aplicado para México y análisis de impuestos a la extracción de hidrocarburos," Ensayos Revista de Economia, Universidad Autonoma de Nuevo Leon, Facultad de Economia, vol. 0(1), pages 35-74, May.

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