On the short-term macroeconomic impacts of data centers entry in an undersized electricity market

Omar Chisari, Antonio Estache and Juan Ignacio Mercatante

No 2026-25, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: This paper analyses the potential transitional direct and indirect macroeconomic impacts of an electricity price increase due to the entry of new large data centers in an economy without excess energy capacity. It tracks the short term distributional, employment, fiscal, sectoral and growth effects of the associated electricity demand shock, if the prevailing electricity price regulation remains unchanged. The quantitative analysis is based on a computable general equilibrium model calibrated for Argentina. The simulations suggest that the failure to adjust the pricing regulation could lead to a short run output drop in the industrial and service sectors. This would increase unemployment and worsen income distribution since the shock hurts less the highest income class in relative terms.

Keywords: Computable General Equilibrium Models; Data Centers; Electricity; Pricing; Regulation; Incidence (search for similar items in EconPapers)
JEL-codes: C68 D58 E16 E20 E60 H12 H22 L11 L50 L94 O11 O32 Q40 (search for similar items in EconPapers)
Pages: 17 p.
Date: 2026-07-05
New Economics Papers: this item is included in nep-reg
References: Add references at CitEc
Citations:

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/411995/3/WP_ECARES_2026_25_OJA.pdf Œuvre complète ou partie de l'œuvre (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:eca:wpaper:2013/411995

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/411995

Access Statistics for this paper

More papers in Working Papers ECARES from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().