Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Can Capital-Energy Substitution Foster Economic Growth?

Can Capital-Energy Substitution Foster Economic Growth? <p>We study the ease of substitution between energy and other production inputs over time. We first develop a growth model with energy where our general production function allows for a nonconstant elasticity of substitution. Theoretical results show that the ease of substitution between capital and energy increases over time with the energy-capital ratio. Next, using country-level data from 108 countries between 1971 and 2011, we provide empirical evidence for a nonconstant elasticity of substitution between capital and energy. Our results imply that policies that increase the speed of the capital-energy substitution can foster long-run economic growth. <italic>(JEL O11, Q43)</italic></p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Land Economics University of Wisconsin Press

Can Capital-Energy Substitution Foster Economic Growth?

Land Economics , Volume 92 (3) – Jul 7, 2016

Loading next page...
 
/lp/university-of-wisconsin-press/can-capital-energy-substitution-foster-economic-growth-00ZRZlLn3o
Publisher
University of Wisconsin Press
Copyright
Copyright by the Board of Regents of the University of Wisconsin System.
ISSN
1543-8325

Abstract

<p>We study the ease of substitution between energy and other production inputs over time. We first develop a growth model with energy where our general production function allows for a nonconstant elasticity of substitution. Theoretical results show that the ease of substitution between capital and energy increases over time with the energy-capital ratio. Next, using country-level data from 108 countries between 1971 and 2011, we provide empirical evidence for a nonconstant elasticity of substitution between capital and energy. Our results imply that policies that increase the speed of the capital-energy substitution can foster long-run economic growth. <italic>(JEL O11, Q43)</italic></p>

Journal

Land EconomicsUniversity of Wisconsin Press

Published: Jul 7, 2016

There are no references for this article.