Energy consumption, technological progress and economic policy

Théophile T. Azomahou (), Raouf Boucekkine () and NUYEN VAN Phu
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NUYEN VAN Phu: BETA, Université Louis Pasteur, Strasbourg
Authors registered in the RePEc Author Service: Phu Nguyen- Van ()

No 2003025, Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: We first provide an empirical sstudy of the energy-saving technological progress on the ENERDATA database. Energy intensity is shown to decrease over the period 1971-1999 in OECD countries, indicating a significant energy-saving technical progress trend. We also show via semiparametric partially linear estimations that : (i) this trend is positively correlated with the investment rate, and (ii) the marginal productivity of investment has accelerated in the sub-period 1985-1999 compared to 1971-1984. Second, we build a general equilibrium vintage capital model with embodied energy-saving technical progress to formalize these findings. In this set-up, we study to which extent a steady increase in the marginal productivity of investment and/or scrapping subsidies could compensate the output loss due to a cut in energy use. The latter fiscal policy is shown to be particularly inefficient in this respect, even under rapid energy-saving technical progress. In the end, our model predicts that the implementation of Kyoto-like protocols in the computers age is much less painful than what it could have been two decades ago.

Keywords: Economic growth; energy-saving technological progress; economic policy; vintage capital; modernization (search for similar items in EconPapers)
JEL-codes: C22 E22 O40 Q40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ino
Date: 2003-11-01
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