Energy Costs, Endogenous Innovation, and Long-run Growth / Energiekosten, endogener technischer Fortschritt und Wirtschaftswachstum
Heinz Welsch and
Klaus Eisenack ()
Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2002, vol. 222, issue 4, 490-499
Based on the observation that energy costs have been decreasing over much of the 20th century, this paper extends the Romer (1990) model of endogenous technological change to examine the impact of secular changes in energy costs on technological progress and long-run growth. The key finding is that decreasing energy costs, while unambiguously increasing the rate of growth of output, enhance or reduce the rate of technological progress depending on the representative household's elasticity of marginal utility. A calibration exercise shows that even if technological progress is actually neither enhanced nor reduced, the endogenous innovation model of growth predicts a substantially stronger effect of energy costs on growth than the neoclassical model.
Keywords: Endogenous technological change; economic growth; energy costs; natural resources; Endogener technischer Fortschritt; Wirtschaftswachstum; Energiekosten; natürliche Ressourcen (search for similar items in EconPapers)
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