Oil price and potential output growth in the long run

G. Lalanne, E. Pouliquen and O. Simon
Additional contact information
G. Lalanne: Insee
E. Pouliquen: Insee
O. Simon: Insee

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: The goal of this paper is to gauge the impact of the expected oil price increase on the potential output growth of the French economy in the long run. This potential output exercise is conducted using CES (Constant Elasticity of Substitution) production functions featuring three factors: capital, labour and energy. Moreover, the sectoral composition of the economy is taken into account through a breaking down of the economy into four sectors (manufacturing industry, construction, market services, and agriculture). The model yields a potential output of growth of about 2 % per year in the absence of oil price variations. The various scenarios of oil price increases result in a shortage of growth between 0.1 and 0.6 % per year in the medium run with respect to the constant oil price scenario. The major part of this growth shortage channels through a negative impact on the manufacturing sector, which is highly energy-intensive and also the engine of technical progress.

Keywords: Potential output growth; Unbalanced growth; Oil price (search for similar items in EconPapers)
JEL-codes: E10 O41 Q43 (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bnsp.insee.fr/ark:/12148/bc6p06zqvzp/f1.pdf Document de travail de la DESE numéro G2009/09 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nse:doctra:g2009-09

Access Statistics for this paper

More papers in Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques Contact information at EDIRC.
Bibliographic data for series maintained by INSEE ().