Value Added in Motion: Macroeconomic Implications of Energy Price Trajectories

Lionel Fontagné, Jean Fouré and Gianluca Santoni

No 426, Development Working Papers from Centro Studi Luca d'Agliano, University of Milano

Abstract: Taking a 2035 horizon, we examine how world energy consumption and emission patterns will be shaped by the changing demand and technological capabilities of different regions. We combine a convergence model fitting three production factors (capital, labour and energy) and two factor-specific productivities, along with a dynamic CGE model of the world economy. We consider three possible “worlds” with very different energy scarcity, and how Copenhagen pledges change economic agents’ calculus in each of these three situations. We find that the most dramatic changes in terms of location of value added are to be expected from the intrinsic differences among the three considered “worlds”, not so much in terms of economic impact of environmental pledges.

Keywords: Growth; Macroeconomic Projections; long run; global economy (search for similar items in EconPapers)
JEL-codes: E23 E27 F02 F47 (search for similar items in EconPapers)
Pages: 18
Date: 2017-02-24
New Economics Papers: this item is included in nep-ene, nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:csl:devewp:426

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