Dale Jorgenson

Contents

List of Tables

ix

Preface

xiii

List of Sources

xxvii

1

A Dual Stability Theorem

1

Dale W. Jorgenson

1.1

Introduction

1

1.2

Relative Stability

2

1.3

Dual Stability Theorem

4

1.4

Dual Instability in the Open System

6

2 The Development of a Dual Economy

9

Dale W. Jorgenson

2.1 Introduction

9

2.2 The Traditional Sector

13

2.3 Modes of Development

18

2.4 A Dual Economy

20

2.5 Agricultural Surplus

25

2.6 Fundamental Differential Equation

34

2.7 Low-level Equilibrium Trap

37

3 The Structure of Multi-Sector Dynamic Models

41

Dale W. Jorgenson

3A Introduction

41

3A.1 Two Theorems on Nonnegativity

42

3A.2 Multiplier Theory

44

3A.3 The Dynamic Input-Output System

46

3A.4 The lagged Accelerator

47

3A.5 The Capital Stock Adjustment Model

50

3A.6 Irreversibility of Capital Accumulation

53

3B Some Further Examples

55

4 Testing Alternative Theories of the Development of a Dual Economy

61

Dale W. Jorgenson

61

4.1 Introduction

4.2 Evidence: Direct Implications

64

4.3 Evidence: Indirect Implications

68

4.4 Summary and Conclusion

74

5 Surplus Agricultural Labor and the Development of a Dual Economy

77

Dale W. Jorgenson

5.1 Introduction

77

5.2 Development of a Dual Economy: A Classical Approach

79

5.3 Development of a Dual Economy: A Neoclassical Approach

89

5.4 Beyond Disguised Unemployment

95

5.5 Summary and Conclusion

99

6 U.S. Tax Policy and Energy Conservation

105

Edward A. Hudson and Dale W. Jorgenson

6.1 Introduction

105

6.2 Inter-Industry Model

108

6.3 Producer Behavior

122

6.4 Growth Model

135

6.5 Energy Projections

141

6.6 Energy Policy

158

6.7 Alternative Oil Prices

166

6.8 Alternative Tax Policies

171

6.9 Conclusion

184

7 Economic Analysis of Alternative Energy Growth Patterns, 1975-2000

191

Edward A. Hudson and Dale W. Jorgenson

7.1 Introduction

191

7.2 The Data Resources Inc. energy Model

193

7.3 Methodology

196

7.4 Historical Growth

197

7.5 Technical Fix Growth

202

7.6 Zero Energy Growth

213

7.7 Conclusions

219

8 The Integration of Energy Policy Models

221

Ben Bernanke and Dale W. Jorgenson

8.1 Introduction

221

8.2 Inter-Industry Model

224

8.3 Natural Gas Model

231

8.4 Integrated Model

239

8.5 Applications

249

9 Economic and Technological Models for Evaluations of Energy Policy

263

Kenneth C. Hoffman and Dale W. Jorgenson

9.1 Introduction

263

9.2 Econometric and Process Analysis Models

291

9.3 Model Integration

275

9.4 Application

283

9.5 Conclusion

287

10 Energy Policy and U.S. Economic Growth

291

Edward A. Hudson and Dale W. Jorgenson

10.1 Econometric and Process Analysis Models

291

10.2 Alternative Energy PoliciesA Dynamic Model of the U.S. Economy

292

10.3 Economic Growth

296

11 The Role of Energy in the U.S. Economy

299

Dale W. Jorgenson

11.1 Introduction

299

11.2 Background

299

11.3 The Carter program

302

11.4 The Recovery

307

11.5 The Outlook

311

12 Energy Prices and the U.S. Economy, 1972-1976

317

Edward A. Hudson and Dale W. Jorgenson

12.1 Introduction

317

12.2 Analytical Framework

318

12.3 Overall Economic Impact

320

12.4 Effect on Economic Structure

321

12.5 Reductions in Energy Use

325

12.6 Reduction in Capital Stock

330

12.7 Change in Employment

334

12.8 Conclusions

339

13 The Economic Impact of Policies to Reduce U.S. Energy Growth

343

Edward A. Hudson and Dale W. Jorgenson

13.1 Introduction

343

13.2 Econometric and process Analysis Models

344

13.3 Alternative Energy Policies

348

13.4 Overview of Economic Effects

349

13.5 Adjustments in the Price Structure

352

13.6 Changes in the Pattern of Final Demand

354

13.7 Changes in Production Patterns

356

13.8 Composition of Total Output

360

13.9 Dynamic Adjustments Through Investment

362

13.10 Aggregate Economic Cost of Energy Reductions

363

13.11 Summary and Conclusion

367

14 The Impact of Restrictions on the Expansion of Electric Generating Capacity

371

Edward A. Hudson, Dale W. Jorgenson, and David C. O'Connor

14.1 Introduction

371

14.2 Reference Case Economy, Energy and Electricity Projections

379

14.3 The Impact of Capacity Restrictions

394

14.4 Summary and Conclusion

418

References

425

Index

441