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.
|Date of creation:||2007|
|Date of revision:|
|Contact details of provider:|| Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA|
Web page: http://www.EconomicDynamics.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonia Diaz & Luis A. Puch & Maria D. Guillo, 2004.
"Costly Capital Reallocation and Energy Use,"
Review of Economic Dynamics,
Elsevier for the Society for Economic Dynamics, vol. 7(2), pages 494-518, April.
- 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.
- 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).
- Jess Benhabib & Aldo Rustichini, 1990.
"Vintage Capital, Investment and Growth,"
886, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:red:sed007:411. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Zimmermann)
If references are entirely missing, you can add them using this form.