TWO GENERAL EQUILIBRIUM MODELS FOR THE U.S. ECONOMY

A general equilibrium approach is used to analyze the impact of inflation on the real sector of the economy and to assess alternative energy policies in the U.S.;Some preliminary data for the U.S. economy is presented, showing that under fairly plausible circumstances an increase in inflation can indeed lead to excess demand for consumption goods, fueling additional price increases.;Further results are obtained, to account for different assumptions on consumer behavior and labor supply. In all cases, the impact of inflation on the supply side of the economy is shown to have potentially the consequence of making prices increase persistently, at least in the short term.;In the second part of the thesis a disaggregate model of the U.S. economy is developed and used to study the impact of certain energy policies. The model includes nine production sectors, twelve consumer groups and sixteen consumption goods; all components of government activity; and a simplified treatment of exports and imports. The general equilibrium nature of the model requires that all agents be on their budget constraints and that for every good or factor supply exactly match demand.;In the first part of the thesis a small two-sector model of the economy with assets markets and specific labor supply assumptions is developed. The impact of inflation on the supply and the demand sides of the economy is analyzed: in assets markets, the increased demand for physical capital drives up its relative price; in the labor market, an increased rate of inflation induces more workers to look for a job. As the labor supply increases, the output of consumption goods--assumed to be more capital intensive--tends to decrease, as predicted by Rybczinski's theorem. The higher relative price of capital also reduces the supply of consumption goods. Excess demand can occur if the losses due to the decrease in the real value of the government debt do not induce consumers to increase their savings sufficiently.;The model is parameterized using estimates for the most important coefficients obtained from published econometric studies. The remaining estimates are identified from an internally consistent data set for 1973.;Dynamic solutions are obtained by assuming a certain growth rate of the labor force and by adding net investment to the endowment of capital every year.;The model is used to simulate energy economy interactions between 1973 and the year 2000. National income and welfare as well as consumers' and government's utility are used to assess alternative energy scenarios. Constraints are imposed on the domestic availability of crude oil and natural gas. The results are used to obtain conclusions about the efficiency and distributional impacts of different energy policies.;The policies studied include the imposition of oil import quotas and the introduction of a tax on energy rents. The results highlight the significant cost of energy conservation policies and the limited redistributive effectiveness of the windfall profits tax.