The Effects of Energy Price Changes on Commodity Prices, Interprovincial Trade, and Employment (Heritage) - Softcover

Melvin, James R.

Softcover

ISBN 10: 0802033377 ISBN 13: 9780802033376

Publisher: University of Toronto Press, 1976

Synopsis

This study investigates how an increase in the price of petroleum and natural gas would alter commodity prices in Ontario, and then estimates the effects on production and employment. A 100 per cent increase in energy prices is assumed. Using the Ontario input-output table it is found that commodity price increases would be relatively small, on average 2.7 per cent over-all and less than 1.6 per cent in basic manufacturing. However, using Cobb-Douglas utility functions it is also calculated that the Ontario labour force would suffer an employment reduction of 2 to 4 per cent.
 Economic policy alternatives open to Ontario are then considered. Subsidies to offset commodity price increases would be very expensive and difficult to administer. Retaliatory measures, such as a change in the Ontario Corporate Income Tax, would be inefficient. It is concluded that from Ontario’s point of view, the best economic policy would be to attempt to ensure that petroleum and natural gas prices remain uniform throughout Canada.

About this title

About the Author

JAMES R. MELVIN is a member of the Department of Economics at the University of Western Ontario.

Edition details

• Publisher: University of Toronto Press
• Publication date: 1976
• Language: English
• ISBN 10: 0802033377
• ISBN 13: 9780802033376
• Binding: Paperback
• Number of pages: 112