Plants, Vintage Capital and Energy Use
This paper studies the aggregate effects of rising prices of energy. We do this in two different macroeconomic models of energy use at the plant level. In the first one, capital cannot be reallocated from plants that use more energy intensive technologies to plants that use more energy saving technologies. In the second model, capital can be freely reallocated across plants but subject to adjustment costs. First, we illustrate the connections between the alternative assumptions on the technology. Then we show how to reinterpret the results obtained with these plant models in terms of vintage capital, and thus, obsolescence. Finally, we evaluate the response of the two models, calibrated to US and EU data, to alternative scenarios for energy price shocks in the years to come.
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- Benhabib, Jess & Rustichini, Aldo, 1990.
"Vintage Capital, Investment And Growth,"
90-22, C.V. Starr Center for Applied Economics, New York University.
- Antonia Diaz & Luis A. Puch & Maria D. Guillo, 2004.
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Elsevier for the Society for Economic Dynamics, vol. 7(2), pages 494-518, April.
- Antonia Díaz & Luis A. Puch & María D. Guilló, 2001. "Costly capital reallocation and energy use," Documentos de Trabajo del ICAE 0111, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
- María Dolores Guilló & Antonia Díaz & Luis A. Puch, 2002. "Costly Capital Reallocation And Enery Use," Working Papers. Serie AD 2002-14, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Luis A. Puch & Antonia Díaz & María D. Guilló, 2001. "Costly Capital Reallocation And Energy Use," Economics Working Papers we015215, Universidad Carlos III, Departamento de Economía.
- Andrew Atkeson & Patrick J. Kehoe, 1994.
"Models of Energy Use: Putty-Putty versus Putty-Clay,"
NBER Working Papers
4833, National Bureau of Economic Research, Inc.
- Patrick J. Kehoe & Andrew Atkeson, 1999. "Models of Energy Use: Putty-Putty versus Putty-Clay," American Economic Review, American Economic Association, vol. 89(4), pages 1028-1043, September.
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