Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/6104

TitleOil dependence and economic instability
Author(s)Conraria, Luís Aguiar
Wen, Yi
KeywordsIndeterminacy
Energy Imports
Externality
Returns to scale
Sunspots
Self-fulfilling expectations
Issue date2007
PublisherUniversidade do Minho. Núcleo de Investigação em Políticas Económicas (NIPE)
CitationNIPE Working Paper series
Series/Report no.3
2007
Abstract(s)We show that dependence on foreign energy can increase economic instability by raising the likelihood of equilibrium indeterminacy, hence making fluctuations driven by self-fulfilling expectations easier to occur. This is demonstrated in a standard neoclassical growth model. Calibration exercises, based on the estimated share of imported energy in production for several countries, show that the degree of reliance on foreign energy for many countries can easily make an otherwise determinate and stable economy indeterminate and unstable.
TypeWorking paper
URIhttp://hdl.handle.net/1822/6104
Peer-Reviewedno
AccessOpen access
Appears in Collections:NIPE - Documentos de Trabalho

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