Growth, Volume 2
Volume 1: Econometric General Equilibrium Modeling presents an econometric approach to general equilibrium modeling of the impact of economic policies. Earlier approaches were based on the "calibration" of general equilibrium models to a single data point. The obvious disadvantage of calibration is that it requires highly restrictive assumptions about technology and preferences, such as fixed input-output coefficients. These assumptions are contradicted by the massive evidence of energy conservation in response to higher world energy prices, beginning in 1973. The econometric approach to general equilibrium modeling successfully freed economic policy analysis from the straitjacket imposed by calibration.
As a consequence of changes in energy prices and new environmental policies, a wealth of historical experience has accumulated over the past two decades. Interpreted within the framework of the neoclassical theory of economic growth, this experience provides essential guidelines for future policy formation. Volume 2: Energy, the Environment, and Economic Growth presents a new econometric general equilibrium model of the United States that captures the dynamic mechanisms underlying growth trends and responses to energy and environmental policies. Jorgenson uses the model to analyze the impacts of environmental regulations on US economic growth and tax policies for controlling US emissions of carbon dioxide.
About the Author
Dale W. Jorgenson is Samuel W. Morris University Professor of Economics at Harvard University.
“This convenient and wide-ranging volume brings together eleven studies, dealing with energy, the environment, economic growth, and tax policy. It will be of considerable interest to economic modelers and policy analysts alike.”
—Charles L. Ballard, Department of Economics, Michigan State University
“In this fine selection of recent papers, Dale Jorgenson, a master in the field of Applied General Equilibrium Analysis, displays his extraordinary talents in a variety of significant applications, including the impact of higher energy prices and carbon taxes on economic growth, the costs of reducing U.S. carbon emissions, and the effects of environmental regulation on international trade.”
—Herbert E. Scarf, Sterling Professor of Economics, Yale University
“Dale Jorgenson and his collaborators make an invaluable contribution to our understanding of the relationship between energy, the environment, and economic growth. Must reading for serious students of this critical public policy issue.”
—Richard Richels, Director of Global Climate Change Research, Electric Power Research Institute
“With the papers collected in this volume, Dale Jorgenson and Peter Wilcoxen revolutionized the measurement of the costs of environmental protection, and ignited controversy, by using their econometrically-estimated general equilibrium model to reveal that pollution taxes can provide a ‘double dividend’—helping to protect the environment while providing revenue that can be used to reduce other more distorting taxes.”
—Don Fullerton, Department of Economics, University of Texas