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Durham University

Research & business

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Publication details

Amin, S. B. & Marsiliani, L. (2015). Energy Price Shocks in Dynamic Stochastic General Equilibrium: The Case of Bangladesh. Review of Business and Economics Studies 3(4): 12-21.

Author(s) from Durham

Abstract

We investigate the role of energy price shocks on business cycle fl uctuations in Bangladesh. In doing
so, we calibrate a Dynamic Stochastic General Equilibrium (DSGE) model, allowing for both energy consumption
by households and as an input in production. We fi nd that qualitatively temporary energy price shocks and
technology shocks produce similar impulse response functions, as well as similar (quantitatively) autocorrelations
in aggregate quantities. The variance in aggregate quantities are better explained by technology
shocks than by energy price shocks, suggesting that technology shocks are more important source of fl uctuations
in Bangladesh.