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A Revised Supply Block for the Major Seven Countries in INTERLINK

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  • Peter Jarrett

    (OECD)

  • Raymond Torres

    (OECD)

Abstract

While the philosophy behind the supply block has not changed since its initial version, each of the block's behavioural equations as well as the parameters of the production functions have been substantially modified. These modifications have been motivated, in general, by a wish to improve the consistency of the block and to relax some of the constraints imposed. Consistency has been improved via a minor modification to the procedure for estimating the parameters of the production function, as well as from the inclusion of a measure of "normal" inventory growth in the demand term in the output equation. In the new version, the equilibrium stock/output ratio is no longer treated as a constant; tax considerations and domestic price effects are now included in the business energy price equations, and the dynamic adjustment of the factor demand equations has been made more general. Finally, some research on potential output, based on the revised production model, is reported ... Quoique les principes généraux à la base du bloc d'offre n'aient pas été modifies depuis leur version initiale, les équations de comportements, ainsi que les paramètres des fonctions de production ont subi de profonds changements. Ces modifications ont été motivées notamment par un souci d'amélioration de la cohérence de l'ensemble du bloc et d'allégement des contraintes pesant sur les équations. La cohérence a bénéficié de l'adaptation d'une procédure d'estimation des paramètres des fonctions de production légèrement modifiée, ainsi que de l'incorporation d'une mesure de la variation "normale" des stocks aux équations d'offre. Des contraintes ont été supprimées, notamment, en ne contraignant plus le rapport stock/production d'équilibre a être constant, en généralisant la dynamique de l'ajustement dans les équations de demande de facteurs et en incorporant les effets de la fiscalité et des prix intérieurs aux équations de prix de l'énergie. Enfin, on présentera une recherche sur la production potentielle basée sur le nouveau modèle d'offre.

Suggested Citation

  • Peter Jarrett & Raymond Torres, 1987. "A Revised Supply Block for the Major Seven Countries in INTERLINK," OECD Economics Department Working Papers 41, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:41-en
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    File URL: http://dx.doi.org/10.1787/780384187533
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    Cited by:

    1. Palle S. Andersen & Henri Bernard, 1991. "Energy shocks and the demand for energy," BIS Working Papers 17, Bank for International Settlements.
    2. Timilsina, Govinda R., 2015. "Oil prices and the global economy: A general equilibrium analysis," Energy Economics, Elsevier, vol. 49(C), pages 669-675.
    3. Benz, Ulrich & Hagist, Christian, 2008. "Technischer Anhang zu "Konjunktur und Generationenbilanz: Eine Analyse anhand des HP-Filters"," FZG Discussion Papers 23, University of Freiburg, Research Center for Generational Contracts (FZG).
    4. Timilsina, Govinda R. & Mevel, Simon & Shrestha, Ashish, 2011. "Oil price, biofuels and food supply," Energy Policy, Elsevier, vol. 39(12), pages 8098-8105.
    5. Pierre Joly, 1990. "Degrés d'utilisation des facteurs de production : impact sur les équilibres économiques," Économie et Statistique, Programme National Persée, vol. 231(1), pages 89-104.

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