ARE SHOCKS TO ENERGY CONSUMPTION IN USA PERMANENT OR TEMPORARY?: SECTORAL ANALYSIS

Department of Economics Issn 1441-5429 Discussion Paper 06/05 Are Shocks to Energy Consumption Permanent or Temporary? Evidence from 182 Countries

This paper applies univariate and panel data unit root tests to annual panel data for 182 countries over the period 1979-2000 to examine the stationarity properties of per capita energy consumption. The univariate unit root test can only reject the unit root null for 29 per cent of the countries at the 10 per cent level or better without a trend and 37 per cent of the countries at the 10 per ce...

How Important Are Sectoral Shocks?

I quantify the contribution of sectoral shocks to business cycle fluctuations in aggregate output. I develop and estimate a multi-industry general equilibrium model in which each industry employs the material and capital goods produced by other sectors. Using data on U.S. industries’ input prices and input choices, I find that the goods produced by different industries are complements to one an...

Online Appendix to "How Important Are Sectoral Shocks?"

In this section, I will apply plant-level input price variation and materials usage to provide an alternate set of estimates of εQ. To do so, I pursue the following two-part strategy. For each industry, I estimate how easily individual plants substitute across their factors of production, by relating plants’ materials purchases to their materials prices. Then, I apply the methods developed in O...

Consumption Responses to Permanent and Transitory Shocks to House Appreciation

We estimate the marginal propensity to consume (MPC) out of permanent and transitory shocks to house price appreciation. Besides borrowing constraints, we consider two different models under which those shocks may affect consumption. In the first one, we treat housing as a risky asset. In the second one, housing has a role as a consumption and as an investment good. In both, changes in the rate...

Henna Tattoo: Temporary or Permanent?