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|Title:||The Colombian Manufacturing Industry During The Era of The Opec Price Shocks (Input/output Application)|
|Author(s):||Mokate, Karen Marie|
|Department / Program:||Economics|
|Degree Granting Institution:||University of Illinois at Urbana-Champaign|
|Abstract:||Economic theory suggests that a manufacturing industry would be affected by an increase in the international oil price because utility-maximizing consumers would reduce their demand for oil-intensive goods. Further, cost-minimizing manufacturers would reduce their oil and energy product input coefficients, through conservation and substitution. These changes would lead to a decline in the total industrial energy utilization rate and a trend toward further declines would be expected as long as oil prices continue to increase.
In the first part of this research, an examination of the data on output, value-added, employment and energy use of the Colombian manufacturing industry for the OPEC price shock era shows that the behavior predicted by theory does not describe that industry's reactions to the OPEC price increases. The industry's energy utilization rate does not follow a downward trend, but rather fluctuates throughout the 1970s. The analysis of the production responses provides no evidence of a decline in the energy intensive sectors; all of the manufacturing sectors experienced cyclical fluctuation during the 1970s, regardless of their energy intensity levels. There is no evidence of change in the intrasectorial product mixes or in the technical input coefficients.
However, the fluctuations in the energy utilization rate of the manufacturing industry coincide with those of the share of that industry's total output which originated in the energy intensive sectors. This suggests that the changes in industrial energy utilization rates have been an automatic result of the cyclical change in the intersectorial product mix, rather than a planned response to higher prices.
In short, the Colombian manufacturing industry has been virtually unresponsive to the increased international oil price. As a result, the continuity of industrial development remains uncertain. Thus, a reevaluation of the oil price and the oil refining expansion policies is suggested.
Any technological change or production response to the oil price increases would be likely to induce change in the functional distribution of industrial income. In the second section of this thesis, then, an input/output methodology for the analysis of the components of this change is introduced; its application to the Colombian case reveals little change in the functional distribution during the 1970s. This result is unsurprising, given the industry's unresponsiveness to the oil price shocks.
Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1984.
|Date Available in IDEALS:||2014-12-16|