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Renewable Energy, Shocks and the Growth Agenda: A Dynamic Stochastic General Equilibrium Approach

Author

Listed:
  • Philip Alege

    (Covenant University, Nigeria.)

  • Queen-Esther Oye

    (Covenant University, Nigeria.)

  • Omobola Adu

    (Covenant University, Nigeria.)

Abstract

Macroeconomic fluctuations observed in real economies are results of identifiable shocks in form of technology, monetary, fiscal, trade, energy or a combination of these shocks. The adverse effects of energy price shocks, in recent decades, have made the call for renewable energy source important. This call is most appropriate in a mono-cultural economy where the fluctuations in crude oil pricing are easily transmitted into the economy. Therefore, this paper seeks to investigate the consequences of technology, and energy shocks on key macroeconomic variables including output and consumption using an energy augmented Small Open Economy Dynamic Stochastic General Equilibrium (SOEDSGE) model. The model is estimated using Bayesian techniques under different scenarios in order to show the various ramifications of the shocks to the Nigerian economy. The findings show that shocks to the renewable energy sector have more impact of the Nigerian economy compared to shocks to the fossil fuel sector.

Suggested Citation

  • Philip Alege & Queen-Esther Oye & Omobola Adu, 2019. "Renewable Energy, Shocks and the Growth Agenda: A Dynamic Stochastic General Equilibrium Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 9(1), pages 160-167.
    • Handle: RePEc:eco:journ2:2019-01-20
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    References listed on IDEAS

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    Cited by:

    1. Opeyemi Akinyemi & Uchenna Efobi & Evans Osabuohien & Philip Alege, 2019. "Regional Integration and Energy Sustainability in Africa: Exploring the Challenges and Prospects for ECOWAS," African Development Review, African Development Bank, vol. 31(4), pages 517-528, December.

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    More about this item

    Keywords

    fossil fuels; technology shocks; demand shocks; renewable energy; SOEDSGE;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment

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