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Elasticity of Substitution between Clean and Dirty Energy Inputs - A Macroeconomic Perspective

Marianne Saam, Chris Papageorgiou () and Patrick Schulte ()

Annual Conference 2014 (Hamburg): Evidence-based Economic Policy from Verein für Socialpolitik / German Economic Association

Abstract: Recently Acemolgu, Aghion, Bursztyn and Hemous (AER 2012) formulated a model in which a high macroeconomic elasticity of substitution between clean and dirty production represents a crucial condition for green growth. Until now it has never been systematically estimated. Using a novel panel of cross-country sectoral data, we formulate specifications of nested CES production functions that allow to estimate a special case of this parameter: the elasticity of substitution between clean and dirty energy inputs. Contrary to what is expected based on the earlier interfuel substitution literature, we find evidence that this elasticity exceeds one.

JEL-codes: O44 Q54 O47 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-ene, nep-env and nep-mac
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Working Paper: Elasticity of substitution between clean and dirty energy inputs: A macroeconomic perspective (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc14:100414

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