The general equilibrium effects of energy efficiency gains in developing countries with urban unemployment
This study is aimed at analyzing the effects of energy efficiency gains in the industrial sector of developing countries that feature urban unemployment. Such efficiency improvements will likely induce adjustment processes and structural change. Understanding the nature of such adjustments is straightforward in the (theoretical) case of economies that are free from distortions. However, in the presence of urban unemployment, the effects of energy efficiency gains are more subtle. Any change in factor productivity, be it autonomous or induced by policy measures such as technology transfer, programs to promote energy efficiency or regulations will be followed by production shifts, sectoral reallocation of labor, and internal migration. In this study, we develop a model of a dualistic economy in the spirit of Harris and Todaro (1970), and analyze the effects energy efficiency improvements.
Volume (Year): 33 (2013)
Issue (Month): 3 ()
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