Costly Capital Reallocation and Energy Use
AbstractIn times series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce the energy required to run the plant. We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be is conformity with the low short-run and high long-run elasticities of energy use seen in data. (Copyright: Elsevier)
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Bibliographic InfoArticle provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 7 (2004)
Issue (Month): 2 (April)
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Other versions of this item:
- Luis A. Puch & Antonia Díaz & María D. Guilló, 2001. "Costly Capital Reallocation And Energy Use," Economics Working Papers we015215, Universidad Carlos III, Departamento de Economía.
- María Dolores Guilló & Antonia Díaz & Luis A. Puch, 2002. "Costly Capital Reallocation And Enery Use," Working Papers. Serie AD 2002-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Antonia Díaz & Luis A. Puch & María D. Guilló, 2001. "Costly capital reallocation and energy use," Documentos del Instituto Complutense de AnÃ¡lisis EconÃ³mico 0111, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales.
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
- Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
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