Evaluation of the DRI Quarterly Macroeconomic Model's Response to Energy and Environmental Cost Shocks

摘要

During the 1970's two major energy price shocks occurred. Each was accompanied by cost shocks for industrial environmental control technology and reductions in the rate of growth of the money supply. Each was followed by a recession. A third energy-price shock and contractions of monetary growth occurred when President Reagan took office. The present recession followed. The DRI macromodel was used to evaluate the impacts of various impacts of various environmental regulations over the 1982 to 1987 period, under different assumptions about energy-price shocks and money-supply growth. The simulation results are critically evaluated in light of the historical evidence of the 1970's. (ERA citation 08:046523)