Energy-Saving Technological Change in Japan
AbstractThe energy-dependence of Japan's economy declined considerably following the first oil crisis in 1973. This paper examines what caused the sharp drop in the use of energy per unit of gross national product (GNP) observed in the 1970s and 1980s, using a simple neo-classical growth model with energy as a third production input. Two possible candidates are investigated: (i) the substitution effect due to changes in the relative price of energy, and (ii) energy-saving technological progress. The findings are as follows. First, the substitution effect alone is weak and alone cannot account for the decline in the energy-GNP ratio. Second, the estimated level of energy-saving technology more than tripled between 1970 and the late 1980s, and the model with energy-saving technological progress is able to explain the drop in the energy-GNP ratio well.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd11-218.
Date of creation: Jan 2012
Date of revision:
Relative Energy Price; Energy-saving Technological Progress;
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