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Full-Text Articles in Macroeconomics
Monetary Policy And Energy Price Shocks, Bao Tan Huynh
Monetary Policy And Energy Price Shocks, Bao Tan Huynh
Research Collection School Of Economics
A New Keynesian framework with endogenous energy production is proposed to investigate the role of monetary policy in addressing disturbances in energy markets. The novelty of the model lies in the endogenous production of energy with convex costs, explicit modeling of goods with different degrees of energy-dependency and sectoral price rigidities. Our analyses prescribe the desirable monetary responses to four types of energy price shocks, highlighting the distinct characteristics of each shock and affirming the need for diverse policy considerations. We also found several points of divergence in relation to previous studies on addressing energy supply shocks. In addition, we …
Energy Price Shocks And External Balances, Bao Tan Huynh
Energy Price Shocks And External Balances, Bao Tan Huynh
Research Collection School Of Economics
This paper studies the impact of a wide set of energy price shocks on exter- nal balances using a two-country framework comprising multiple sectors and en- dogenous energy production with convex costs. The paper disentangles different demand and supply shocks in the energy market through their distinct impact on external balances. It provides a theoretical confirmation of Kilian et al. (2009) and a theoretical foundation to the determining role of the non-energy trade balance in the transmission of energy price shocks. The presence of durables also highlights the immediate channel through which energy prices impact the non-energy trade balance.
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Macroeconomic Effects Of Energy Price Shocks On The Business Cycle, Bao Tan Huynh
Research Collection School Of Economics
This paper proposes a framework of endogenous energy production with convex costs to investigate the general equilibrium effects of energy price shocks on the business cycle. This framework explicitly models the consumption of durables and nondurables and implements a high complementarity between energy and the usage of durables and capital. The model predicts energy price elasticities of various consumption variables that fall within reasonable agreement with empirical estimates. Convex costs in energy production produce energy price and energy supply dynamics that tallies well with empirical behavior. Our analysis confirms in a theoretical setting recent observations that not all energy price …