Hicksian Traverse Revisited: Conditions for the Energy Transition

Adrien Nguyen-Huu and Antonin Pottier

CEE-M Working Papers from CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro

Abstract: In this article, we analyze the transition dynamics, what Hicks called the traverse, from one equilibrium toward another one, and the conditions for such a transfer in a bi-sectoral economy under technological shocks. To this end, we revisit the Hick Traverse model and add to it inter-sectoral relations in the form of intersectoral consumption of energy for both the energy and the manufacturing sector. We investigate two distinct assumptions about consumption behavior of manufactured goods. We show that our model extends Hicks' one and leads to the same condition for a good traverse path, independently from the net energy return. We highlight that energy production technologies nevertheless provide constrains on viable states of the economy and its maximal growth rate, and that energy consumption technologies impact investment and prices crucially.

Keywords: Hicks Traverse; fixed production technology; equilibrium analysis; traverse analysis; energy economy; sectoral economy (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ene
Note: View the original document on HAL open archive server: https://hal.science/hal-01966173v2
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Hicksian traverse revisited: Conditions for the energy transition (2020)
Working Paper: Hicksian Traverse Revisited: Conditions for the Energy Transition (2020)
Working Paper: Hicksian Traverse Revisited: Conditions for the Energy Transition (2019)
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