Energy prices and short-run economic performance

Mr. Tatom observes that increasing energy prices since late 1978 are responsible for lower output and productivity, general inflation, tight investment capital, consumer spending cuts, and unemployment. He examines the magnitude of these changes empirically, using a reduced-form model to determine growth in gross national product (GNP) by linking money-stock growth to economic activity. After energy price effects are assessed, the estimates imply that there was no significant shift in this linkage after 1978. The simulation appears to provide explanations for economic developments that are consistent with those made for the periods before 1978. 21 references, 5 tables. (DCK)