Abstract
This paper constructs and estimates a novel two-sector Dynamic Stochastic General Equilibrium (DSGE) model to analyze the macroeconomics of Kazakhstan’s dual-energy structure, where a large fossil fuel sector coexists with an emerging renewable segment. The model’s key innovation is its integration of an endogenous, depletable oil stock and a dual-inflation Taylor-type rule, which together capture the specific transmission channels between hydrocarbon dependence and green investment. By differentiating between oil-driven and core inflation, the framework quantifies how oil price volatility transmits monetary conditions to the renewable sector. Bayesian estimation, using sectoral data from national accounts, reveals a pronounced asymmetry: oil stock/discovery dynamics and oil revenue fluctuations dominate macroeconomic volatility, while the renewable sector exhibits stable output but remains vulnerable to oil-driven monetary tightening transmitted mainly through indirect channels. The results indicate that Kazakhstan’s ongoing energy transition offers a stabilizing diversification benefit in principle but remains structurally constrained by macroeconomic dynamics and fiscal patterns anchored to hydrocarbon conditions. These findings provide a quantitative basis for designing transition policies that mitigate cross-sector spillovers and support effective diversification in resource-dependent economies.