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http://dx.doi.org/10.15266/KEREA.2022.31.3.367

Comparing the Impacts of Renewable Energy Policies on the Macroeconomy with Electricity Market Rigidities: A Bayesian DSGE Model  

Choi, Bongseok (Department of Commerce and Finance, Kookmin University)
Kim, Kihwan (Korea Energy Economics Institute)
Publication Information
Environmental and Resource Economics Review / v.31, no.3, 2022 , pp. 367-391 More about this Journal
Abstract
We develop an energy-economy Bayesian DSGE model with the two sectors of electricity generations-traditional (fossil, nuclear) and renewable energy. Under imperfect substitutability between the two sectors, a technological shock on renewable energy sectors does not sufficient to facilitate energy conversion and reduce greenhouse gas emissions. Technology innovation on greenhouse gas emission reduction is also required. More importantly, sufficient investment should be derived by a well-functioning electricity market where electricity price plays a signal role in efficient allocation of resources. Indeed, market rigidities cause reduced consumption.
Keywords
Greenhouse gas; Renewable energy; Electricity markets; Bayesian DSGE;
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Times Cited By KSCI : 1  (Citation Analysis)
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