Macroeconomic impact of electric power outage: simulation results from a CGE modelling experiment for Hungary

Klára Major and Luca Flóra Drucker

No 9580, EcoMod2016 from EcoMod

Abstract: This paper presents the results of a CGE application that is used to measure and understand how sectoral shocks might influence the Hungarian economy, its economic agents and its different industries. The electricity outages are modelled by the decrease in the supply of energy. A 62 sectoral CGE model has been calibrated for the Hungarian economy. The capital stock of the energy industry is shocked, which has led to a decrease in the supply of energy. It is assumed that energy is a close complement to other goods both in production and consumption. In the base scenario a 2.08% decline in the supply of energy leads to a 0.53% decline in the GDP. Without price rigidities and other frictions, the adjustment is mainly driven by agents who can react at the lowest price. Therefore, this estimation should be considered as a lower bound on the real costs of adjustment. It is also shown that if prices are distorted, the costs of an outage are higher.

Keywords: Hungary; Impact and scenario analysis; General equilibrium modeling (CGE) (search for similar items in EconPapers)
Date: 2016-07-04
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-mac and nep-reg
References: Add references at CitEc
Citations:

Downloads: (external link)
http://ecomod.net/system/files/hetfa_cge_ver1.2_electricityoutage.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:ekd:009007:9580

Access Statistics for this paper

More papers in EcoMod2016 from EcoMod Contact information at EDIRC.
Bibliographic data for series maintained by Theresa Leary ().