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Decomposition of US manufacturing energy intensity and elasticities of components with respect to energy prices

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  • Lescaroux, François

Abstract

This paper proposes an analysis of changes in the US manufacturing energy intensity between 1974 and 1998. The starting point is a three-term decomposition of an intensity index which evaluates annually the respective contributions of changes in industrial structure, efficiency gains at the sectoral level and substitution between energy resources to aggregate productivity improvements. Then, we study the time paths followed by each of these three components: using spectral analysis techniques, we show that they behave very differently as the structural influence plays a part mainly in the short-run, substitution between energy resources acts principally in the long-run and the changes in sectoral intensity cause both trend-variations and cyclical ones. Finally, we focus on the effect of energy price evolution on each of the three components. Allowing energy price rises and decreases to have asymmetric effects, we estimate both the long-run impacts and the short-run adjustments.

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  • Lescaroux, François, 2008. "Decomposition of US manufacturing energy intensity and elasticities of components with respect to energy prices," Energy Economics, Elsevier, vol. 30(3), pages 1068-1080, May.
  • Handle: RePEc:eee:eneeco:v:30:y:2008:i:3:p:1068-1080
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    Cited by:

    1. repec:eco:journ2:2017-02-04 is not listed on IDEAS
    2. Yuan, Chaoqing & Liu, Sifeng & Wu, Junlong, 2010. "The relationship among energy prices and energy consumption in China," Energy Policy, Elsevier, vol. 38(1), pages 197-207, January.
    3. repec:eee:eneeco:v:67:y:2017:i:c:p:169-181 is not listed on IDEAS
    4. Xu, X.Y. & Ang, B.W., 2014. "Multilevel index decomposition analysis: Approaches and application," Energy Economics, Elsevier, vol. 44(C), pages 375-382.
    5. Chai, Jian & Guo, Ju-E & Wang, Shou-Yang & Lai, Kin Keung, 2009. "Why does energy intensity fluctuate in China?," Energy Policy, Elsevier, vol. 37(12), pages 5717-5731, December.
    6. Prat, Georges & Uctum, Remzi, 2011. "Modelling oil price expectations: Evidence from survey data," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(3), pages 236-247, June.
    7. Mulder, Peter & de Groot, Henri L.F., 2013. "Dutch sectoral energy intensity developments in international perspective, 1987–2005," Energy Policy, Elsevier, vol. 52(C), pages 501-512.
    8. Åsa Löfgren & Adrian Muller, 2010. "Swedish CO 2 Emissions 1993–2006: An Application of Decomposition Analysis and Some Methodological Insights," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(2), pages 221-239, October.
    9. Blomberg, Jerry & Henriksson, Eva & Lundmark, Robert, 2012. "Energy efficiency and policy in Swedish pulp and paper mills: A data envelopment analysis approach," Energy Policy, Elsevier, vol. 42(C), pages 569-579.
    10. Mulder, Peter & de Groot, Henri L.F., 2012. "Structural change and convergence of energy intensity across OECD countries, 1970–2005," Energy Economics, Elsevier, vol. 34(6), pages 1910-1921.
    11. Gustavo A. Marrero & Francisco J. Ramos-Real, 2013. "Activity Sectors and Energy Intensity: Decomposition Analysis and Policy Implications for European Countries (1991–2005)," Energies, MDPI, Open Access Journal, vol. 6(5), pages 1-20, May.
    12. Wang, Qunwei & Zhao, Zengyao & Zhou, Peng & Zhou, Dequn, 2013. "Energy efficiency and production technology heterogeneity in China: A meta-frontier DEA approach," Economic Modelling, Elsevier, vol. 35(C), pages 283-289.
    13. Parker, Steven & Liddle, Brantley, 2016. "Energy efficiency in the manufacturing sector of the OECD: Analysis of price elasticities," Energy Economics, Elsevier, vol. 58(C), pages 38-45.
    14. Peter Mulder, 2015. "International Specialization, Structural Change and the Evolution of Manufacturing Energy Intensity in OECD Countries," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).

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