Energy-Price Dynamics and US Depressions: Recent Analogies.

摘要

A review of energy-price and -use dynamics in the two US depressions since 1890 reveals that several analogies can be drawn between these depressions. These analogies are extended to recent behavior of the US energy-producing and -consuming sectors. The paper focuses on the combination of point-of-consumption relative energy-price increases and point-of-production energy-price declines which occur during the years of declining industrial output that lead into a depression. A model developed links capital intensity and indebtedness in the energy sector to pricing decisions that are driven by changes in industrial output. It is shown that declining industrial output and energy demand can cause price increases for capital-intense energy utilities, breaking the law of supply and demand. The model's validity is verified by statistical tests carried out over the period 1929 to 1981. The model is tested for the electric-utility industry, the most capital-intense energy producer. It is shown that motor-vehicle price changes provide a far-better prediction of changes in industrial output than do aggregate industrial prices. Changes in the relative price of motor vehicles and electricity are shown to be highly correlated and to be good predictors of changes in real 1982 GNP. It is suggested that the energy-sector phenomenon demonstrated in this paper might productively be incorporated into macroeconomic models. (ERA citation 08:043986)