A macroeconomic analysis of energy subsidies in a small open economy

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dc.contributor.authorGlomm, Gerhard
dc.contributor.authorJung, Juergen
dc.contributor.departmentTowson University. Department of Economicsen_US
dc.date.accessioned2018-05-23T15:42:49Z
dc.date.available2018-05-23T15:42:49Z
dc.date.issued2013
dc.date.updated2014-12-30
dc.description.abstractWe construct a dynamic model of a small open economy to analyze the effects of large energy subsidies. The model includes domestic energy production and consumption, trade in energy at world market prices, as well as private and public sector production. The model is calibrated to Egypt and used to study reforms such as reductions in energy subsidies with corresponding reductions in various tax instruments or increases in infrastructure investment. We calculate the new steady states, transition paths to the new steady state and the size of the associated welfare losses or gains. Our main results for a 15 percent cut in energy subsidies are: (i) Steady state GDP drops in most of our experiments as less energy is used in production. (ii) Steady state consumption rises in most of our experiments. (iii) Welfare can rise by as much as 0.6 percent in consumption equivalent terms. (iv) The largest gains in terms of output and of welfare can be obtained when savings from energy subsidy cuts are used to fund additional infrastructure investment.en_US
dc.description.urihttps://ideas.repec.org/p/tow/wpaper/2013-02.htmlen_US
dc.formatapplication/pdf
dc.format.extent38 pagesen_US
dc.genreworking papersen_US
dc.identifierdoi:10.13016/M2N87330J
dc.identifier.citationGerhard Glomm & Juergen Jung, 2013. "A Macroeconomic Analysis of Energy Subsidies in a Small Open Economy," Working Papers 2013-02, Towson University, Department of Economics, revised Oct 2014.en_US
dc.identifier.otherJEL: E21
dc.identifier.otherJEL: E63
dc.identifier.otherJEL: H55
dc.identifier.otherJEL: J26
dc.identifier.otherJEL: J45
dc.identifier.urihttp://hdl.handle.net/11603/10860
dc.language.isoen_USen_US
dc.publisherTowson University. Department of Economicsen_US
dc.relation.isAvailableAtTowson University
dc.relation.ispartofseriesTowson University Department of Economics Working Paper Series;2013-02
dc.subjectEnergy subsidiesen_US
dc.subjectFiscal policy reformen_US
dc.subjectPublic sector reformen_US
dc.subjectGrowthen_US
dc.subjectEconomic developmenten_US
dc.titleA macroeconomic analysis of energy subsidies in a small open economyen_US
dc.typeTexten_US

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