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Technical Change, Investment and Energy Intensity


  • Kurt Kratena


This paper analyses the role of different components of technical change on energy intensity by applying a Translog variable cost function setting with (short- run) fixed capital to the new EU KLEMS dataset for five selected EU countries (Denmark, Italy, Netherlands, UK and Spain). The framework applied represents an accounting of technical change components, comprising autonomous (disembodied) as well as technical change embodied in capital goods. It is extended in order to incorporate embodied technical change induced by energy prices by adding an equation for (physical) capital stock accumulation. The model can be used for explaining and tracing back the long-run impact of the interaction of prices, capital accumulation and technical change on energy intensity. The empirical results distinguish between industries with embodied technical change and industries with capital-energy complementarity.

Suggested Citation

  • Kurt Kratena, 2007. "Technical Change, Investment and Energy Intensity," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 295-314.
  • Handle: RePEc:taf:ecsysr:v:19:y:2007:i:3:p:295-314
    DOI: 10.1080/09535310701572008

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    Cited by:

    1. Suh, Dong Hee, 2015. "Identifying Factor Substitution and Energy Intensity in the U.S. Agricultural Sector," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205264, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    2. Dong Hee Suh, 2015. "Declining Energy Intensity in the U.S. Agricultural Sector: Implications for Factor Substitution and Technological Change," Sustainability, MDPI, Open Access Journal, vol. 7(10), pages 1-14, September.
    3. Patrick Schulte & Heinz Welsch & Sascha Rexhäuser, 2016. "ICT and the Demand for Energy: Evidence from OECD Countries," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(1), pages 119-146, January.
    4. Kurt Kratena & Ina Meyer, 2007. "Energy Consumption and CO2 Emissions in Austria. The Role of Energy Efficiency and Fuel Substitution," WIFO Monatsberichte (monthly reports), WIFO, vol. 80(11), pages 893-907, November.
    5. International Monetary Fund, 2010. "Islamic Republic of Iran; Selected Issues Paper," IMF Staff Country Reports 10/76, International Monetary Fund.


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