Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal
Autor(a) principal: | |
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Data de Publicação: | 2013 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.5/15708 |
Resumo: | This paper examines the economic and budgetary impacts of fuel prices using a dynamic general equilibrium model of the Portuguese economy which high- lights the mechanisms of endogenous growth and includes a detailed modeling of the public sector. The fuel price scenarios are based on forecasts by the US Department of Energy (DOE-US) and the International Energy Agency (IEA-OECD) and represent a wide range of projections for absolute and relative fossil fuel prices. In terms of the long term economic impact, our results suggest a 1.9 % drop in GDP in the DOE-US scenario and 1.6 % in the IEA-OECD scenario. As to the budgetary impact, higher fuel prices lead to lower tax revenues, which, coupled with a reduction in public spending, translate into lower public deficits. Accordingly, increasing fuel prices create an important policy trade off in that they can contribute to reducing the public deficit while hindering economic growth. We find that fairly strong incentives for wind energy can reduce the economic impact of fuel prices by 14.2 % in the DOE-US price scenario and 18.5 % reduction in the IEA-OECD price scenario. Finally, our results highlight the importance of public sector spending decisions and the mechanisms of endogenous growth in understanding the impact of fossil fuel prices. Indeed, a scenario of higher fuel prices would, with exogenous public decisions and exogenous economic growth assumptions, result in substantially smaller economic effects and yield adverse budgetary effects. |
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Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of PortugalFuel pricesEconomic performanceBudgetary consolidationDynamic general equilibriumEndogenous growthPortugalThis paper examines the economic and budgetary impacts of fuel prices using a dynamic general equilibrium model of the Portuguese economy which high- lights the mechanisms of endogenous growth and includes a detailed modeling of the public sector. The fuel price scenarios are based on forecasts by the US Department of Energy (DOE-US) and the International Energy Agency (IEA-OECD) and represent a wide range of projections for absolute and relative fossil fuel prices. In terms of the long term economic impact, our results suggest a 1.9 % drop in GDP in the DOE-US scenario and 1.6 % in the IEA-OECD scenario. As to the budgetary impact, higher fuel prices lead to lower tax revenues, which, coupled with a reduction in public spending, translate into lower public deficits. Accordingly, increasing fuel prices create an important policy trade off in that they can contribute to reducing the public deficit while hindering economic growth. We find that fairly strong incentives for wind energy can reduce the economic impact of fuel prices by 14.2 % in the DOE-US price scenario and 18.5 % reduction in the IEA-OECD price scenario. Finally, our results highlight the importance of public sector spending decisions and the mechanisms of endogenous growth in understanding the impact of fossil fuel prices. Indeed, a scenario of higher fuel prices would, with exogenous public decisions and exogenous economic growth assumptions, result in substantially smaller economic effects and yield adverse budgetary effects.Springer VerlagRepositório da Universidade de LisboaPereira, Alfredo MarvãoPereira, Rui Marvão2018-06-25T10:45:57Z2013-122013-12-01T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10400.5/15708engPereira, Alfredo Marvão e Rui Marvão Pereira (2013). "Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal". Portuguese Economic Journal, 12(3):181-2141617-982X (print)10.1007/s10258-013-0094-ymetadata only accessinfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-05-07T01:30:47Zoai:www.repository.utl.pt:10400.5/15708Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T17:01:18.902265Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
title |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
spellingShingle |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal Pereira, Alfredo Marvão Fuel prices Economic performance Budgetary consolidation Dynamic general equilibrium Endogenous growth Portugal |
title_short |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
title_full |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
title_fullStr |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
title_full_unstemmed |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
title_sort |
Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal |
author |
Pereira, Alfredo Marvão |
author_facet |
Pereira, Alfredo Marvão Pereira, Rui Marvão |
author_role |
author |
author2 |
Pereira, Rui Marvão |
author2_role |
author |
dc.contributor.none.fl_str_mv |
Repositório da Universidade de Lisboa |
dc.contributor.author.fl_str_mv |
Pereira, Alfredo Marvão Pereira, Rui Marvão |
dc.subject.por.fl_str_mv |
Fuel prices Economic performance Budgetary consolidation Dynamic general equilibrium Endogenous growth Portugal |
topic |
Fuel prices Economic performance Budgetary consolidation Dynamic general equilibrium Endogenous growth Portugal |
description |
This paper examines the economic and budgetary impacts of fuel prices using a dynamic general equilibrium model of the Portuguese economy which high- lights the mechanisms of endogenous growth and includes a detailed modeling of the public sector. The fuel price scenarios are based on forecasts by the US Department of Energy (DOE-US) and the International Energy Agency (IEA-OECD) and represent a wide range of projections for absolute and relative fossil fuel prices. In terms of the long term economic impact, our results suggest a 1.9 % drop in GDP in the DOE-US scenario and 1.6 % in the IEA-OECD scenario. As to the budgetary impact, higher fuel prices lead to lower tax revenues, which, coupled with a reduction in public spending, translate into lower public deficits. Accordingly, increasing fuel prices create an important policy trade off in that they can contribute to reducing the public deficit while hindering economic growth. We find that fairly strong incentives for wind energy can reduce the economic impact of fuel prices by 14.2 % in the DOE-US price scenario and 18.5 % reduction in the IEA-OECD price scenario. Finally, our results highlight the importance of public sector spending decisions and the mechanisms of endogenous growth in understanding the impact of fossil fuel prices. Indeed, a scenario of higher fuel prices would, with exogenous public decisions and exogenous economic growth assumptions, result in substantially smaller economic effects and yield adverse budgetary effects. |
publishDate |
2013 |
dc.date.none.fl_str_mv |
2013-12 2013-12-01T00:00:00Z 2018-06-25T10:45:57Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.5/15708 |
url |
http://hdl.handle.net/10400.5/15708 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Pereira, Alfredo Marvão e Rui Marvão Pereira (2013). "Fossil fuel prices and the economic and budgetary challenges of a small energy-importing economy : the case of Portugal". Portuguese Economic Journal, 12(3):181-214 1617-982X (print) 10.1007/s10258-013-0094-y |
dc.rights.driver.fl_str_mv |
metadata only access info:eu-repo/semantics/openAccess |
rights_invalid_str_mv |
metadata only access |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Springer Verlag |
publisher.none.fl_str_mv |
Springer Verlag |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
instname_str |
Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
instacron_str |
RCAAP |
institution |
RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799131101351903232 |