Energy price shocks and milk price adjustments

2017 ◽  
Vol 25 (4) ◽  
pp. 268-271 ◽  
Author(s):  
Xun Li ◽  
Rigoberto A. Lopez ◽  
Rui Wang
CFA Digest ◽  
2009 ◽  
Vol 39 (3) ◽  
pp. 37-39
Author(s):  
M.E. Ellis

2010 ◽  
Author(s):  
Ronald A. Ratti ◽  
Youn Seol ◽  
Kyung Hwan Yoon
Keyword(s):  

2018 ◽  
Vol 24 (2) ◽  
pp. 231-254
Author(s):  
Soma Patra

Nine out of the last ten recessions in the United States have been preceded by an increase in the price of oil as noted by Hamilton [Palgrave Dictionary of Economics]. Given the small share of energy in gross domestic product this phenomenon is difficult to explain using standard models. In this paper, I show that firm entry can be an important transmission and amplifying channel for energy price shocks. The results from the baseline dynamic stochastic general equilibrium (DSGE) model predict a drop in output that is two times the impact in a model without entry. The model also predicts an increase in energy prices would lead to a decline in real wages, investment, consumption, and return on investment. Additionally, using US firm level data, I demonstrate that a rise in energy prices has a negative impact on firm entry as predicted by the DSGE model. This lends further support toward endogenizing firm entry when analyzing the effects of energy price shocks.


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