An energy factor proportions model of the US economy

Henry Thompson

Energy Economics, 2014, vol. 43, issue C, 1-5

Abstract: A factor proportions model examines the effects of falling energy input and its rising price in the US economy based on a novel production function motivated by the definition of physical work. This physical production function specifies separate interaction of energy and labor with capital, estimated with annual data from 1951 to 2008. Energy has a large output elasticity and inelastic own input demand. A rising energy price lowers the return to capital in the general equilibrium even though capital is a moderate substitute for energy. Energy has robust comparative static elasticities linked to manufacturing in the general equilibrium.

Keywords: Energy; Substitution; Factor proportions; General equilibrium (search for similar items in EconPapers)
JEL-codes: C51 C68 F11 F14 Q37 Q40 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:43:y:2014:i:c:p:1-5

DOI: 10.1016/j.eneco.2014.01.013

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