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Evaluation of a DSGE Model of Energy in the United Kingdom Using Stationary Data

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  • Nasir Aminu

    (Cardiff Metropolitan University)

Abstract

I examine the impact of energy price shock (oil prices shock and gas prices shock) on the economic activities in the United Kingdom using a dynamic stochastic general equilibrium model with a New Keynesian Philips Curve. I decomposed the changes in output caused by all of the stationary structural shocks. I found that the fall in output during the financial crisis period is driven by domestic demand shock, energy prices shock and world demand shock. I found the energy prices shock’s contribution to fall in output is temporary. Such that, the UK can borrow against such a temporary fall. This estimated model can create additional input to the policymaker’s choice of models.

Suggested Citation

  • Nasir Aminu, 2018. "Evaluation of a DSGE Model of Energy in the United Kingdom Using Stationary Data," Computational Economics, Springer;Society for Computational Economics, vol. 51(4), pages 1033-1068, April.
    • Handle: RePEc:kap:compec:v:51:y:2018:i:4:d:10.1007_s10614-017-9657-9
    DOI: 10.1007/s10614-017-9657-9
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    Cited by:

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    Energy price; DSGE; Output;
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