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Threshold effects of energy price changes

Daan van Soest (), Gerard Kuper () and Jan Jacobs ()

No 00C31, Research Report from University of Groningen, Research Institute SOM (Systems, Organisations and Management)

Abstract: This paper presents a theoretical model emphasising energy investments’characteristics of uncertainty and irreversibility. The theoretical modelsuggests threshold effects. Firms are induced to substitute away from energyonly if prices of energy exceed a certain threshold level and they reverse thetechnology only if energy prices are low enough. Estimating a simpleinvestment relation using panel data for the Dutch economy, we findevidence for threshold effects.

Date: 2000
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http://irs.ub.rug.nl/ppn/240565746 (application/pdf)

Related works:
Working Paper: Threshold Effects of Energy Price Changes (2000) Downloads
Working Paper: Threshold effects of energy price changes (2000) Downloads
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