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A Contribution to the Energy-Capital Complementarity Debate

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  • M. Junaid Khawaja

    (Bahauddin Zakariya University)

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    Abstract

    By means of a widely used flexible functional form estimated for seven manufacturing industries this paper examines complementarity between energy and capital. The industry level data have been used to avoid the aggregation bias in the estimation of elasticities of substitution as pointed out by Solow (1987). We have disaggregated energy into three energy types viz. electricity, gas and oils as inputs. Elasticities of substitution between capital and energy types are found to be negative in most of the cases, indicating substitutability between capital and energy.

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    Bibliographic Info

    Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.

    Volume (Year): 29 (1994)
    Issue (Month): 1 (January)
    Pages: 91-102

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    Handle: RePEc:dse:indecr:v:29:y:1994:i:1:p:91-102

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