Decomposing supply shocks in the US electricity industry: evidence from a time-varying Bayesian panel vector autoregression model
Journal article
Authors | Apergis, Nicholas and Polemis, Michael |
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Abstract | This paper investigates spillovers between electricity supply shocks and US growth, using monthly data from 48 US States, spanning the period January 2001-September 2016, while it employs a novel strategy for electricity supply shocks based on a time-varying Bayesian panel VAR model. It accounts for the decomposition of electricity supply per fuel mixture and links its possible interactions with the US macroeconomic conditions. In that sense, the methodology models the coefficients as a stochastic function of multiple structural characteristics. The findings document that GDP growth increases after a positive electricity supply shock, irrelevant to the source of energy that generates it. The absence of a sluggish adjustment mechanism, may reflect weak competition and significant market power by the incumbents in the electricity industry. Lastly, we argue that the rate of response of GDP growth per capita to electricity supply shocks, provides an indication that a market power effect prevails in the US electricity industry. |
Keywords | Research Subject Categories::SOCIAL SCIENCES; electricity supply shocks; US growth; electricity industry |
Year | 2020 |
Journal | Journal of Energy Markets |
Publisher | Incisive Media |
ISSN | 1756-3607 |
1756-3615 | |
Digital Object Identifier (DOI) | https://doi.org/10.21314/JEM.2020.210 |
Web address (URL) | http://hdl.handle.net/10545/625271 |
http://creativecommons.org/licenses/by-nc-nd/4.0/ | |
hdl:10545/625271 | |
Publication dates | 09 Oct 2020 |
Publication process dates | |
Deposited | 23 Oct 2020, 09:42 |
Accepted | 15 Sep 2020 |
Rights | Attribution-NonCommercial-NoDerivatives 4.0 International |
Contributors | University of Derby and University of Piraeus |
File | File Access Level Open |
File | File Access Level Open |
https://repository.derby.ac.uk/item/93570/decomposing-supply-shocks-in-the-us-electricity-industry-evidence-from-a-time-varying-bayesian-panel-vector-autoregression-model
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