Share
Metadata
Show full item recordMacroeconomic Impact of Energy Transition
Content Type
Faculty
Carrera/Programa
- Magister en Economía
xmlui.ArtifactBrowser.AdvancedSearch.type_profguia
Título al que opta
- Magister en Economía
Modalidad
- Tesinas
Fecha de aprobación
- 2024-10-30
Subjects
Keywords
- DSGE Model
- Aggregate Production Function
- Monetary Policy
- Environment and Growth
- Energy Shocks
Abstract
We examine the macroeconomic effects of the energy transition, focusing on the impact of oil prices on GDP, productivity and inflation. We find that energy dependence on fossil fuels increases vulnerability to oil price shocks, negatively affecting Total Factor Productivity (TFP). Using the Solow decomposition and including energy as part of the capital stock, we find two key effects: The Price and Scale Effect, in which higher energy prices increase production costs and reduce TFP; and The Recomposition Effect, in which greater use of domestic renewables boosts TFP by reducing reliance on non-renewable imports. Our findings for Chile between 2001 and 2019 the TFP adjustment for energy factors provides a complemen- tary and enriched view of productivity, especially in periods or contexts with high volatility in energy consumption or prices. Finally, using a New-Keynesian DSGE model calibrated for Chile, we examine the macroeconomic consequences of the energy transition. A counterfactual scenario shows that, without di- versification of the energy matrix, the economic impact of higher oil prices would have been more severe, with larger GDP declines, higher inflation, tighter monetary policy, and a steeper fall in TFP, highlighting the benefits of Chile’s shift to a more renewable energy matrix.