Costly capital reallocation and energy use

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Title: Costly capital reallocation and energy use
Authors: Díaz Rodríguez, Antonia | Puch González, Luis Antonio | Guillo, Maria Dolores
Research Group/s: Grupo de Estudios de Paz y Desarrollo (GEPYD)
Center, Department or Service: Universidad de Alicante. Departamento de Métodos Cuantitativos y Teoría Económica
Keywords: Energy price | Energy use | Costly capital reallocation | Number of plants
Knowledge Area: Fundamentos del Análisis Económico
Issue Date: Aug-2002
Publisher: Instituto Valenciano de Investigaciones Económicas
Citation: DÍAZ, Antonia; PUCH, Luis A.; GUILLÓ, M. Dolores. “Costly capital reallocation and energy use”. Working Papers (Instituto Valenciano de Investigaciones Económicas). WP-EC 2002-14
Abstract: In time series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce the energy required to run the plant. We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be in conformity with the low short-run and high long-run elasticities of energy use seen in data.
Sponsor: Puch thanks the DGCYT and the Fundación Ramón Areces. Díaz thanks the DGCYT, project BEC2001-1653. Guilló thanks the DGCYT, project BEC2001-0535.
Language: eng
Type: info:eu-repo/semantics/workingPaper
Peer Review: si
Publisher version:
Appears in Collections:INV - GEPYD - Working Papers
INV - DMCTE - Working Papers

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