Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174108
Authors: 
Meenagh, David
Minford, Patrick
Oyekola, Olayinka
Year of Publication: 
2015
Series/Report no.: 
Cardiff Economics Working Papers E2015/19
Abstract: 
We find that, when estimated, a two sector computable dynamic stochastic general equilibrium open economy model of the U.S. that formally admits energy into the production process can generate plausible parameter values that can be applied to deal with a broad range of economic issues. As a benchmark, we require that the model fits the data for output, real exchange rate, energy use, and consumption: output because it serves as a measure of a country's total income,real exchange rate because it serves as a determinant of a country's relative competitiveness,energy use because it serves as an indicator of special inputs into a country's production process,and consumption because it serves as a yardstick for evaluating a country's standard of living. Finally, we argue that this model, with appropriate extensions, some of which we also propose, can help future modelers to tackle other research questions.
Subjects: 
Two sector
US DSGE model
Oil price volatility
Open economy
Indirect inference
JEL: 
E32
D58
F41
C52
Q43
Document Type: 
Working Paper

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