Costly capital reallocation and energy use

In time series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce the energy required to run the planto We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be in conformity with the low short-mn and high long-run elasticities of energy use seen in data. Furthermore, our model displays variations in capacity utilization that are in line with those observed during the period of major oil price increases.Energy price, Energy use, Costly capital reallocation, Number of plants.

COSTLY CAPITAL REALLOCATION AND ENERGY USE

In thime series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce toe energy required to run the plant. We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be in conformity with the low short-run and high long-run elasticities of energy use seen in data. Furthermore, our model displays variations in capacity utilization that are in line with those observed during the period of major oil price increases.

Costly capital reallocation and energy use

In time series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce the energy required to run the planto We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be in conformity with the low short-mn and high long-run elasticities of energy use seen in data. Furthermore, our model displays variations in capacity utilization that are in line with those observed during the period of major oil price increases

Paths of Development in Open Economies: The Role of Land

This paper shows, within a Heckscher-Ohlin version of the two-sector neoclassical growth model, that land, besides having long-run effects, is also a main determinant of the speed of convergence toward the steady state when there are cross-sector capital share differences. This result stands in sharp contrast to the predictions of standard neoclassical growth frameworks, and calls for a reinterpretation of the conditional-convergence and the resource-curse findings. More specifically, the model predicts that the former finding requires the existence not only of diminishing returns but also of relatively small differences in capital shares across sectors. With respect to the latter finding, our results imply that it may be a consequence of purely transitional effects of natural riches on growth, and that it can not be interpreted as evidence that natural inputs necessarily harm long-run welfare. We produce empirical evidence on the relationship between land, income levels, and growth rates, and present data on cross-sector capital shares. We claim that most of that evidence is consistent with the predictions of the model.

Costly Capital Reallocation and Energy Use

In times series data, energy use does not change much with energy price changes. However, energy use is responsive to international differences in energy prices in cross-section data across countries. In this paper we consider a model of energy use in which production takes place at individual plants and capital can be used either to directly produce output or to reduce the energy required to run the plant. We assume that reallocating capital from one use to another is costly. This turns out to be crucial for the quantitative properties of the model to be is conformity with the low short-run and high long-run elasticities of energy use seen in data. (Copyright: Elsevier)energy price, energy use, capital reallocation, number of plants.