Energy price shocks and macroeconomic adjustments

Journal Article · Sun Apr 01 04:00:00 EST 1984 · Nat. Resour. J.; (United States)

OSTI ID:6598913

Pindyck, R S; Rotemberg, J J

This paper expains how energy price shocks can affect macroeconomic variables through a variety of different channels. Some of these effects are the result of rigidities in wages or prices, and in some cases the direction of the effect is ambiguous. The macroeconomic impact of an energy price shock should be viewed as a social cost which warrants a public policy response. In addition to economic vulnerability, dependence on imported oil also creates an undesirable political and strategic vulnerability. The paper reviews the implication that these effects have for economic and energy policy, particularly in the area of windfall profits taxes and strategic reserves. 16 references, 4 figures, 2 tables.

• Research Organization: Massachusetts Inst. of Tech., Cambridge
• OSTI ID: 6598913
• Journal Information: Nat. Resour. J.; (United States), Journal Name: Nat. Resour. J.; (United States) Vol. 24:4lt. slash2; ISSN NRJOA
• Country of Publication: United States
• Language: English

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