Policy Analysis and Forecasting in the World Economy: A Panel Dynamic Stochastic General Equilibrium Approach

2013 ◽  
Author(s):  
Francis Vitek
Keyword(s):  
General Equilibrium ◽  
Policy Analysis ◽  
World Economy ◽  
Dynamic Stochastic General Equilibrium ◽  
The World ◽  
Equilibrium Approach ◽  
Dynamic Stochastic

scholarly journals Oil and the world economy: some possible futures

2014 ◽  
Vol 372 (2006) ◽  
pp. 20120327 ◽  
Author(s):  
Michael Kumhof ◽  
Dirk Muir
Keyword(s):  
World Economy ◽  
Oil Prices ◽  
Dynamic Stochastic General Equilibrium ◽  
Output Growth ◽  
Production Functions ◽  
Supply Shocks ◽  
Conventional Production ◽  
The World ◽  
Production Technologies ◽  
Dynamic Stochastic

This paper, using a six-region dynamic stochastic general equilibrium model of the world economy, assesses the output and current account implications of permanent oil supply shocks hitting the world economy. For modest-sized shocks and conventional production technologies, the effects are modest. But for larger shocks, for elasticities of substitution that decline as oil usage is reduced to a minimum, and for production functions in which oil acts as a critical enabler of technologies, output growth could drop significantly. Also, oil prices could become so high that smooth adjustment, as assumed in the model, may become very difficult.

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