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ICT and Energy Use: Patterns of Substitutability and Complementarity in Production

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Author Info

  • Elena Ketteni

    (Economics Research Centre, University of Cyprus)

  • Theofanis Mamuneas

    ()
    (Economics Research Centre, University of Cyprus)

  • Panos Pashardes

    (Economics Research Centre, University of Cyprus)

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    Abstract

    In this project we investigate the relationship between ICT capital, energy use and economic growth. We first formulate and estimate e production model which embodies rational expectations and dynamic optimization in the presence of efficiency gains and adjustment costs. We investigate the role of price increases, though price elasticities, and how technical efficiency levels affect inputs and especially energy. The results suggest that efficiency gains from energy improvements or new energy inputs are not offset by their adjustment costs. They have though lower efficiency when compared to the other inputs. The elasticities suggest that energy is complement with ICT and non-ICT capital, skilled and unskilled labor; and a substitute to material inputs.

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    Bibliographic Info

    Article provided by University of Cyprus, Economics Research Centre in its journal Cyprus Economic Policy Review.

    Volume (Year): 7 (2013)
    Issue (Month): 1 (June)
    Pages: 63-86

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    Handle: RePEc:erc:cypepr:v:7:y:2013:i:1:p:63-86

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    Keywords: ICT capital; energy; substitutability; complementarity; efficiency gains; adjustment costs.;

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    Cited by:
    1. Khayyat, Nabaz T. & Lee, Jongsu & Lee, Jeong-Dong, 2014. "How ICT Investment Influences Energy Demand in South Korea and Japan?," MPRA Paper 55454, University Library of Munich, Germany.

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