Supply-Side Effects of Strong Energy Price Hikes in German Industry and Transportation

44 Pages Posted: 8 Jun 2016

See all articles by Thomas Knetsch

Thomas Knetsch

Deutsche Bundesbank - Economics Department

Alexander Molzahn

Deutsche Bundesbank

Date Written: 2009

Abstract

The paper studies the short-term effects of energy price hikes on the supply of industrial goods and transport services including the repercussions on remuneration of input factors. While industry had suffered more strongly from the oil price shock of the late 1970s compared with the one of the early 1970s and the 2004-08 upsurge, evidence is reverse for transportation. Regarding the impact on the income distribution, both sectors share the pattern that in the recent episode rising energy costs were more than compensated by falling unit labor costs while in the 1970s cost structures had been strained by expansive wage policy in addition to the oil price shocks.

Keywords: Energy prices, supply of goods and services, income distribution

JEL Classification: E23, E25, Q43

Suggested Citation

Knetsch, Thomas and Molzahn, Alexander, Supply-Side Effects of Strong Energy Price Hikes in German Industry and Transportation (2009). Bundesbank Series 1 Discussion Paper No. 2009,26, Available at SSRN: https://ssrn.com/abstract=2785355 or http://dx.doi.org/10.2139/ssrn.2785355

Thomas Knetsch (Contact Author)

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

Alexander Molzahn

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

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