Economic Growth and the Transition from Traditional to Modern Energy in Sweden
Astrid Kander and
David Stern ()
CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University
We examine the role of substitution from traditional to modern energy carriers and of differential rates of innovation in the use of each of these in Sweden from 1850 to 1950. We use a simple growth model with a nested CES production function and exogenous factor augmenting technological change and carry out a growth accounting decomposition based on the econometric results. Energy and energy augmenting technological change contributed more than a third of the economic growth in this period. Even though the rate of technical change was much larger for modern energy, innovation in the use of traditional energy carriers contributed more to growth between 1850 and 1890, since the cost share of traditional energy was so much larger than that of modern energy in that period. However, after 1890 we find that modern energy contributed much more to economic growth than traditional energy, but increasingly labor augmenting technological change and capital accumulation became the most important drivers of growth in the final decades of the period.
JEL-codes: O13 O41 Q43 N13 N14 (search for similar items in EconPapers)
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Journal Article: Economic growth and the transition from traditional to modern energy in Sweden (2014)
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Persistent link: http://EconPapers.repec.org/RePEc:een:camaaa:2013-65
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