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How much does real GDP respond to unanticipated changes in the real price of oil? Commonly used censored VAR models suggest a substantial decline in real GDP in response to unexpected increases in the real price of oil, yet no response to unexpected declines. We show that these estimates are invalid. Based on a structural model that encompasses both symmetric and asymmetric models as special cases, correctly computed impulse responses are of roughly the same magnitude in either direction, consistent with formal tests for symmetric responses. We discuss implications for theoretical models and for policy responses to energy price shocks.
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Models that treat innovations to the price of energy as predetermined with respect to U.S. macroeconomic aggregates are widely used in the literature. For example, it is common to order energy prices first in recursively identified VAR models of the transmission of energy price shocks. Because exactly identifying assumptions are inherently untestable, this approach in practice has required an act of faith in the empirical plausibility of the delay restriction used for identification. An alternative view that would invalidate such models is that energy prices respond instantaneously to macroeconomic news, implying that energy prices should be ordered last in recursively identified VAR models. In this paper, we propose...
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The goal of research was to measure and evaluate the impact of fire on land surface albedo and carbon exchange in the boreal region of Alaska by employing remote sensing and geospatial methods. Two research studies explore the landscape-scale impacts of fire on land cover and energy balance and broad-scale impact on carbon exchange. Summertime land surface albedo change from fire disturbance in an Alaska black spruce dominated landscape was studied using Landsat image data. Albedo is key in determining surface net radiation and can be dramatically changed by fire. Fire-induced albedo change was found to be spatially and temporally variable based on pre-burn vegetation, canopy density, burn severity, and site age....
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