Skip to main content
×
Home
    • Aa
    • Aa
  • Get access
    Check if you have access via personal or institutional login
  • Cited by 4
  • Cited by
    This article has been cited by the following publications. This list is generated based on data provided by CrossRef.

    Aguiar-Conraria, Luís and Wen, Yi 2012. OPEC's oil exporting strategy and macroeconomic (in)stability. Energy Economics, Vol. 34, Issue. 1, p. 132.


    Chin, Chi-Ting Guo, Jang-Ting and Lai, Ching-Chong 2012. A NOTE ON INDETERMINACY AND INVESTMENT ADJUSTMENT COSTS IN AN ENDOGENOUSLY GROWING SMALL OPEN ECONOMY. Macroeconomic Dynamics, Vol. 16, Issue. S3, p. 438.


    Zhang, Yan and Chen, Yan 2012. TARIFF AND EQUILIBRIUM INDETERMINACY: A GLOBAL ANALYSIS. Macroeconomic Dynamics, Vol. 16, Issue. S3, p. 394.


    Chen, Yan and Zhang, Yan 2011. A NOTE ON TARIFF POLICY, INCREASING RETURNS, AND ENDOGENOUS FLUCTUATIONS. Macroeconomic Dynamics, Vol. 15, Issue. 02, p. 279.


    ×

A NOTE ON OIL DEPENDENCE AND ECONOMIC INSTABILITY

  • Luís Aguiar-Conraria (a1) and Yi Wen (a2)
  • DOI: http://dx.doi.org/10.1017/S1365100508070429
  • Published online: 01 November 2008
Abstract

We show that dependence on foreign energy can increase economic instability by raising the likelihood of equilibrium indeterminacy, hence making it easier for fluctuations driven by self-fulfilling expectations 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.

Copyright
Corresponding author
Address correspondence to: Luís Aguiar-Conraria, Departamento de Economia, Universidade do Minho, Campus de Gualtar, Braga 4710, Portugal; e-mail: lfaguiar@eeg.uminho.pt.
Linked references
Hide All

This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

Luís Aguiar-Conraria and Yi Wen (2007) Understanding the large negative impact of oil shocks. Journal of Money, Credit, and Banking 39, 925944.

Robert B. Barsky and Lutz Kilian (2001) Do we really know that oil caused the great stagflation? A monetary alternative. In Ben S. Bernanke and Kenneth S. Rogoff (eds.), Macroeconomics Annual, pp. 137183. Cambridge, MA: MIT Press for NBER.

Jess Benhabib and Roger Farmer (1994) Indeterminacy and increasing returns. Journal of Economic Theory 63, 1941.

James Hamilton (2003) What is an oil shock? Journal of Econometrics 113, 363398.

Paul Hansen and Stephen Knowles (1998) Human capital and returns to scale. Journal of Economic Studies 25, 118123.

Robert Inklaar (2007) Cyclical productivity in Europe and the United States: Evaluating the evidence on returns to scale and input utilization. Economica 74, 822841.

Sung Kwack and Lee Sun (2005) Economies of scale, technological progress, and the sources of economic growth: Case of Korea, 1969–2000. Journal of Policy Modeling 27, 265283.

John Laitner and Dmitriy Stolyarov (2004) Aggregate returns to scale and embodied technical change: Theory and measurement using stock market data. Journal of Monetary Economics 51, 191234.

Sylvain Leduc and Keith Sill (2004) A quantitative analysis of oil-price shocks, systematic monetary policy, and economic downturns. Journal of Monetary Economics 51, 781808.

Tsutomu Miyagawa , Yukie Sakuragawa , and Miho Takizawa (2006) Productivity and business cycles in Japan: Evidence from Japanese industry data. Japanese Economic Review 57, 161186.

Yi Wen (1998) Capacity utilization under increasing returns to scale. Journal of Economic Theory 81, 736.

Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Macroeconomic Dynamics
  • ISSN: 1365-1005
  • EISSN: 1469-8056
  • URL: /core/journals/macroeconomic-dynamics
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords: