Energy prices and capital formation: 1972--1977

Journal Article · Tue May 01 04:00:00 EDT 1979 · Fed. Reserve Bank St. Louis Rev.; (United States)

OSTI ID:6109596

Tatom, J A

Connections are drawn between the energy price increases of 1973--74 and the slow business investment pace following the recession of 1974--75. The incentive for firms to invest theoretically diminishes with higher energy prices. The implications this theory has for energy prices relative to the productivity of existing capital and labor resources and to the slowing of aggregate investment are examined as evidence. The analysis indicates that the adjustments made to the nine percent drop in capital/labor ratio represents a change in the trend growth and that these effects will continue to affect capital formation.

• OSTI ID: 6109596
• Journal Information: Fed. Reserve Bank St. Louis Rev.; (United States), Journal Name: Fed. Reserve Bank St. Louis Rev.; (United States) Vol. 61:5; ISSN FRBRD
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
292000 -- Energy Planning & Policy-- Supply
Demand & Forecasting
CAPITAL
ECONOMIC GROWTH
ECONOMIC IMPACT
ENERGY SUPPLIES
FINANCIAL INCENTIVES
INVESTMENT
MANPOWER
NORTH AMERICA
PRICES
USA