Energy-economy interactions: oil and the world economy

Thesis/Dissertation · Fri Jan 01 04:00:00 EST 1982

OSTI ID:6745336

Saunders, H D

This dissertation presents a model designed for testing the dynamic interaction between energy supply and the macroeconomy. The model is used to simulate the energy-economy interaction at the OECD level of aggregation and, in particular, is used to explore the long-run strength of the energy-economy linkage, the short-run impacts of energy shocks or disruptions, and the implications of these for oil-producing countries' economic objectives. The model draws upon and builds ties among three modeling traditions - the short-run macroeconomic models of the supply-side shock economists; the neoclassical tradition of long-run factor-output modeling first applied to energy by Hogan and Manne; and the models of OPEC optimizing behavior. Simulation runs of the model point to three conclusions: (1) the long-run energy-economy linkage appears to be relatively weak, and in close agreement with the neoclassical Hogan-Manne theory; (2) the short- and medium-run linkages appear to be much stronger, indicating that shocks and supply disruptions could have serious consequences; (3) the incentives for producers to adopt extreme pricing/production strageties do not appear great. Strong short-run macrofeedbacks severely limit the gains to be made from abrupt price increases.

• OSTI ID: 6745336
• Country of Publication: United States
• Language: English

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ECONOMIC ANALYSIS
ECONOMICS
ENERGY MODELS
ENERGY SOURCES
ENERGY SUPPLIES
FOSSIL FUELS
FUELS
GLOBAL ASPECTS
INTERNATIONAL ORGANIZATIONS
OECD
OIL-EXPORTING COUNTRIES
OPEC
PETROLEUM