RESEARCH
RESEARCH
"Endogenous oil production in closed economy framework", (with Kevin Moran), Job market paper
Abstract: We develop a closed-economy stochastic general equilibrium (DSGE) model in which oil (resource) production and usage are analyzed extensively. We specify that oil is extracted out of a resource stock whose replacement can either be exogenous, or endogenous and reacting to underlying economic incentives. We then simulate the economy's reaction to various shocks under both scenarios. Our simulations indicate that modeling resource production as responding to economic incentives importantly affects both the business-cycle and long-term implications of our model.
"Depletion, Discovery and the macroeconomics of nonrenewable resources" (with Stephen Gordon)
Abstract: We present a framework for incorporating non-renewable resources into macroeconomic models. In particular, we propose a simple production function for the extraction process as well as a law of motion for the stock of nonrenewable resources that incorporates technical progress and the discovery and development of new reserves. We provide conditions for optimal paths, and identify conditions in which extraction is sustainable and when it is not.
"On the determinant of oil reserves additions: a panel data analysis"
This paper examines the influence of competing economic factors in driving reserve additions in oil-producing countries. It specifies and estimates a panel data model for 37 countries in the 1980–2016 period. The results show a significant positive influence of oil price on global oil reserve additions and a positive correlation between reserve additions and cumulative reserve additions. The specificity of this study is that it accounts for other economic factors such as oil rent as percent of GDP and trade openness. It results that oil rent as percent of GDP happens to have a negative influence on the evolution of reserve additions, whereas reserve additions turn to be positively correlated with trade openness.
"Exhauxtible resources and investment rule: the effects of discoveries", (with Youmali Ouoba)
Abstract: For a single stock of exhaustible resource to be exploited, the well-know Hartwick rule (HR) and the permanent income hypothesis (PIH) have been proposed to meet intergenerational equity. However, these equity rules need to be questioned under many stocks. This paper aims at analyzing equity and comparing these two rules of exhaustible resource management under new discoveries. To account for new discoveries' dynamics, we supposed that the exhaustible resources stocks are exploited sequentially. The results show that the HR and the PIH lead to intergenerational equity with a simultaneous exploitation of many stocks. However, the HR is no longer consistent with intergenerational equity objectives when many stocks are sequentially exploited. As a result, the PIH is the one that will generally achieve intergenerational equity with and without discoveries.
"Growth Without Bound: a Reconsideration in a Finite Ecological Environment."
Abstract: This paper presents a framework for incorporating ecological and environmental constraints into macroeconomic growth models. In particular, we use an ecologically-constrained technology for the production of consumption goods that reconcile AK production technology and production technologies showing diminishing return to capital. We find that unlike the traditional Ramsey AK model, taking into account ecological constraints, and even allowing for future increases in productivity, leads to limited growth potential in the long run.