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Energy Substitution, Production, and Trade in the US

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  • Henry Thompson

Abstract

Energy proves an essential input with robust comparative static effects in a factor proportions model of production for the US. Energy has a robust marginal product and significant substitution in a novel production function motivated by the definition of physical work. In this physical production function, energy and labor inputs interact separately with capital. The present data cover the years 1951 to 2008. One version of the model assumes an endogenous price of energy, and another endogenous energy imports at the world price. These comparative static models of production and trade have an array of policy implications.

Suggested Citation

  • Henry Thompson, 2010. "Energy Substitution, Production, and Trade in the US," Auburn Economics Working Paper Series auwp2010-06, Department of Economics, Auburn University.
    • Handle: RePEc:abn:wpaper:auwp2010-06
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    File URL: https://cla.auburn.edu/econwp/Archives/2010/2010-06.pdf
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    References listed on IDEAS

    as
    1. Thompson, Henry, 2006. "The applied theory of energy substitution in production," Energy Economics, Elsevier, vol. 28(4), pages 410-425, July.
    2. Chang, Winston W, 1979. "Some Theorems of Trade and General Equilibrium with Many Goods and Factors," Econometrica, Econometric Society, vol. 47(3), pages 709-726, May.
    3. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    4. Jones, Ronald W. & Easton, Stephen T., 1983. "Factor intensities and factor substitution in general equilibrium," Journal of International Economics, Elsevier, vol. 15(1-2), pages 65-99, August.
    5. Wolfgang F. Stolper & Paul A. Samuelson, 1941. "Protection and Real Wages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 9(1), pages 58-73.
    6. Ronald W. Jones, 2018. "The Structure of Simple General Equilibrium Models," World Scientific Book Chapters, in: International Trade Theory and Competitive Models Features, Values, and Criticisms, chapter 4, pages 61-84, World Scientific Publishing Co. Pte. Ltd..
    7. Jones, Ronald W. & Peter Neary, J., 1984. "The positive theory of international trade," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 1, pages 1-62, Elsevier.
    8. Jones, Ronald W & Scheinkman, Jose A, 1977. "The Relevance of the Two-Sector Production Model in Trade Theory," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 909-935, October.
    9. Henry Thompson, 1985. "Complementarity in a Simple General Equilibrium Production Model," Canadian Journal of Economics, Canadian Economics Association, vol. 18(3), pages 616-621, August.
    10. Henry Thompson, 2010. "Wages in a factor proportions time series model of the US," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 19(2), pages 241-256.
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    Keywords

    Energy; Substitution; Production; Trade;
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