Macroeconomic Impacts of the Least-Cost Strategy

摘要

The energy using capital stock of the US was built during a period of declining real energy prices. The price increases that have been experienced since 1973 have led to a situation where the capital stock in place is not optimal (in terms of its efficiency of energy use) given the current relative price structure. If the capital stock were totally but gradually rebuilt under current prices, the amount of energy used by this stock would be significantly lower than that which is currently being used. An input-output framework is used to estimate the structural changes resulting from the above described investment and energy expenditure perturbations. It is assumed that the level of economic activity in terms of GNP is not affected as a result of these changes. An input-output model is estimated for 1978 and aligned with the aggregate economic and energy flows for that year. Then, the least cost capital investments, resulting fuel savings, resulting energy expenditure savings, and decrease in energy supply investments are incorporated into the input-output model to assess what the impacts on the structure of output and employment might have been if the system had optimally responded to the energy prices of 1978. This case is presented in comparison with a second year of such investments. (ERA citation 08:015070)