Threshold effects of energy price changes
Daan van Soest (),
Gerard Kuper () and
Jan Jacobs ()
No 200007, CCSO Working Papers from University of Groningen, CCSO Centre for Economic Research
This paper presents a theoretical model emphasising energy investments’ characteristics of uncertainty and irreversibility. The theoretical model suggests threshold effects. Firms are induced to substitute away from energy only if prices of energy exceed a certain threshold level and they reverse the technology only if energy prices are low enough. Estimating a simple investment relation using panel data for the Dutch economy, we find evidence for threshold effects.
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Working Paper: Threshold Effects of Energy Price Changes (2000)
Working Paper: Threshold effects of energy price changes (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:gro:rugccs:200007
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