Disequilibrium macro model and catastrophe theory: the case of an oil shock
This study builds a simple disequilibrium macromodel of a small open economy that imports oil from an exogenous unit. The model is motivated by very slow adjustment of prices and wages to disequilibrium. Output on the other hand adjusts to its final level instantaneously. A rationing scheme is specified that explicitly takes into account the spillover effects and differentiates between notional, effective, and actual quantities. In a Solow-Stiglitz (1968) setting, a dynamic model is developed in which the dynamic forces depend on the economic environment specified by the Malinvandian regimes: Classical Unemployment, Keynesian Unemployment, Repressed Inflation, and the Walrasian Equilibrium. Given that dynamic system, the author seeks to identify the stationary points of the system (quasi-equilibria) and to find their stability properties. To the disequilibrium model an oil shock is introduced and its effects on employment, real output, real wage, and the stationary points of the system are investigated. A one-time increase (decrease) in the real price of oil and a continuous increase (decrease) in the real price of oil are considered. The path the economy takes and, in particular, the continuous and discontinuous behavior of the quasi-equilibria are investigated. Finally, the model government policy is incorporated and different policy alternatives are studied.
- OSTI ID:
- 5054796
- Resource Relation:
- Other Information: Thesis (Ph. D.)
- Country of Publication:
- United States
- Language:
- English
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ENERGY MODELS
ENERGY SHORTAGES
ECONOMIC IMPACT
OIL-IMPORTING COUNTRIES
ECONOMY
FUEL SUPPLIES
PETROLEUM
SHORTAGES
ENERGY SOURCES
ENERGY SUPPLIES
FOSSIL FUELS
FUELS
020700* - Petroleum- Economics
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