Large-scale macroeconomic models have been used extensively to analyze a wide range of important economic issues. They were originally developed to study the economy's response to monetary and fiscal policies. During the 1970s these models were expanded and revised to track the inflationary processes and to incorporate key energy variables so that they could be used to examine the impacts of energy price shocks. This study compares the responses of 14 prominent macroeconomic models to supply-side shocks in the form of sudden energy price increases or decreases and to policies for lessening the impacts of price jumps. Four energy price shocks were examined: oil price increases of 50 and 20 percent, an oil price reduction of 20 percent, and an 80 percent increase in domestic natural gas prices. Five policy responses were considered for offsetting the GNP impacts of the larger oil price increase: monetary accommodation, an income tax rate reduction, an increase in the investment tax credit for equipment, a reduction in the employer's payroll tax rate, and an oil stockpile release

Table of contents : Content: Macroeconomic Impacts of Energy Shocks: A Summary of the Key Results (EMF 7 Working Group Report). Macroeconomic Impacts of Energy Shocks and Policy Responses: A Structural Comparison of Fourteen Models (B.G. Hickman). Macroeconomic Models and Energy Policy Issues (H.G. Huntington, J.E. Eschbach). EMF 7 Study Design (B.G. Hickman, H.G. Huntington). Appendix: A Comparison of Macroeconomic Model Structures (J.A. Salinas, J.P. Weyant).