We employ an open economy general equilibrium model to investigate the effects of governmentenergy policy, with an emphasis on corn-based ethanol, on the U.S. economy. The modelspecification incorporates world and domestic markets, assumes pollution costs from fuelconsumption, and allows...

Significant government support for biofuels has led to rapid growth in U.S. ethanol production andresearch to develop more advanced biofuels. In this paper we construct a general equilibrium, openeconomy model that captures the rationale typically invoked to justify government intervention in...