The effect of electricity prices on Lithuania’s gross domestic product and its competitiveness: implications for the proposed nuclear power plant project in Lithuania ; Elektros energijos kainų įtaka Lietuvos bendrajam vidaus produktui ir konkurencingumui: reikšmė planuojamam naujos atominės elektrinės projektui Lietuvoje
Institutional Repository of ISM University of Management and Economics, 2011
Online
Hochschulschrift
Zugriff:
Higher energy prices could be a competitive disadvantage and have negative effect on the economy as they make production inputs more expensive, consumers ’ demand decreases due to higher prices of other goods and inelastic demand for electricity, inflation increases and exports drops. Therefore, it is hypothesized that higher electricity price makes country less competitive and has a negative effect on economic performance. The effect of electricity price on economic performance is examined by employing a method, similar to the one used before by Kuodis (2002), however less complex and less time consuming, as such modified 1-2-3 basic CGE model should be able to capture the main effects in such country as Lithuania. Results achieved by using this model, which captures inelastic demand for electricity, show that the 30 % increase in electricity price cause consumption to decrease by 1.02 %, real GDP– by 1.54 %, exports – by 0.38 % in nominal terms and 1.28 % in real terms and inflation amounts for 0.98 %. Results from this model also prove that such simplified model (compared to previously used model for this problem), can give significantly reliable results and capture the main effects of increase in electricity price. Effect of e lectricity price on the country’s competitiveness is examined by factor analysis, however, it shows that it could not be proved by factor analysis that higher electricity prices are responsible for lower competitiveness performance in EU. However, there is also a strong presumption that this survey was not capable of capturing the effect, which is actually existent. Therefore, further resea rch should try to find new methods to prove the existence of this relationship. All in all, electricity and its price increase have unique compared with other goods and significant effect on Lithuanian economy. Related issues should be treated with caution as nuclear energy may be not the only solution suitable to ensure the smallest electricity price in all circumstances as every electricity generating source has its shortcomings. Such projects as nuclear power plants are very capital intensive, long span and therefore risky projects, while other technologies has some sometimes not obvious advantages as counter- cyclical effects. Moreover, it is reasonable to think that electricity price decrease would not stimulate economy as much as its in crease decrease e conomic growth. This possible asymmetry could be a subject for further research as well.
Titel: |
The effect of electricity prices on Lithuania’s gross domestic product and its competitiveness: implications for the proposed nuclear power plant project in Lithuania ; Elektros energijos kainų įtaka Lietuvos bendrajam vidaus produktui ir konkurencingumui: reikšmė planuojamam naujos atominės elektrinės projektui Lietuvoje
|
---|---|
Autor/in / Beteiligte Person: | Šečkutė, Vaiva ; Giedraitis, Vincentas |
Link: | |
Veröffentlichung: | Institutional Repository of ISM University of Management and Economics, 2011 |
Medientyp: | Hochschulschrift |
Schlagwort: |
|
Sonstiges: |
|