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An energy factor proportions model of the US economy

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  • Thompson, Henry

Abstract

A factor proportions model examines the effects of falling energy input and its rising price in the US economy based on a novel production function motivated by the definition of physical work. This physical production function specifies separate interaction of energy and labor with capital, estimated with annual data from 1951 to 2008. Energy has a large output elasticity and inelastic own input demand. A rising energy price lowers the return to capital in the general equilibrium even though capital is a moderate substitute for energy. Energy has robust comparative static elasticities linked to manufacturing in the general equilibrium.

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  • Thompson, Henry, 2014. "An energy factor proportions model of the US economy," Energy Economics, Elsevier, vol. 43(C), pages 1-5.
    • Handle: RePEc:eee:eneeco:v:43:y:2014:i:c:p:1-5
    DOI: 10.1016/j.eneco.2014.01.013
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    References listed on IDEAS

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    Cited by:

    1. Mohn, Klaus, 2016. "Undressing the emperor: A critical review of IEA’s WEO," UiS Working Papers in Economics and Finance 2016/6, University of Stavanger.
    2. Thompson, Henry, 2016. "A physical production function for the US economy," Energy Economics, Elsevier, vol. 56(C), pages 185-189.

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    More about this item

    Keywords

    Energy; Substitution; Factor proportions; General equilibrium;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q37 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Issues in International Trade
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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