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Productive energy use and economic growth: Energy, physical and human capital relationships

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  • Pablo-Romero, María del P.
  • Sánchez-Braza, Antonio

Abstract

Ecological and biophysical economists and historians of economics consider that availability of energy inputs has played a key role in driving economic growth in industrialized and emerging economies. Nevertheless, being very sensitive to structural characteristics or stages of economic development, the strength of this link differs among countries. This study analyzes the role of energy in economic growth from a geographical standpoint by estimating an aggregate translog production function, with human and physical capital and productive energy use as production factors, within a growth framework. Panel data of 38 major countries for the period from 1995 to 2007 were used. The strength of the link between energy and growth is analyzed for the whole sample and the following relevant country groups: OECD, BRIC, NAFTA, East Asian, East European and EU15 countries. Obtained results show that the calculated productivity elasticities with respect to energy use are positive for all country groups. BRIC countries have higher elasticities, around 0.37, and EU15 countries have lower elasticities, around 0.12. Weak substitutability relationships between energy and capital are observed for all groups, except for BRIC and East European countries, which show complementarity relationships.

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  • Pablo-Romero, María del P. & Sánchez-Braza, Antonio, 2015. "Productive energy use and economic growth: Energy, physical and human capital relationships," Energy Economics, Elsevier, vol. 49(C), pages 420-429.
  • Handle: RePEc:eee:eneeco:v:49:y:2015:i:c:p:420-429
    DOI: 10.1016/j.eneco.2015.03.010
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    More about this item

    Keywords

    Translog function; Substitutability; Energy use; Human capital; Physical capital; Panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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