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| Qiu, Cheng; Colson, Gregory; Zhang, Zibin; Wetzstein, Michael E.. |
| The US Environmental Protection Agency announced a waiver allowing an increase in the Fuel-Ethanol blend limit (the “blend wall” ) from 10% (E10) to 15% (E15) on October,2010.Justifications for the waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline, leading to energy security. In this paper, employing Monte Carlo simulations and Savitzky-Golay smoothing filter, an empirical study examines this waiver revealing an anomaly where a relaxation of this blend wall elicits a demand response. Under a wide range of elasticities, this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity. The economics supporting this result and associated policy implications are... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Blend wall; Energy security; Ethanol; Resource /Energy Economics and Policy. |
| Ano: 2011 |
URL: http://purl.umn.edu/98795 |
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| Qiu, Cheng; Colson, Gregory; Wetzstein, Michael E.. |
| In this study, a Structural Vector Autoregression model (SVAR) is employed to decompose how supply/demand structural shocks affect food and fuel prices within fuel and corn markets. Results indicate that the relative importance of each structural shock in explaining the variation of corn prices is different. Our findings support the hypothesis that corn prices increase as a response to those positive demand shocks in the short run, while in the long run, global competitive agricultural commodities markets as well as positive supply shocks respond to commodity price shocks, restoring prices to its long-run trends. In conclusion, fundamental market forces of demand and supply as well as real economic aggregated demand shocks were the main contributors of the... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Food; Fuel; Food Consumption/Nutrition/Food Safety; Resource /Energy Economics and Policy. |
| Ano: 2011 |
URL: http://purl.umn.edu/103689 |
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