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A Contribution to the Energy-Capital Complementarity Debate

Author

Listed:
  • M. Junaid Khawaja

    (Bahauddin Zakariya University)

Abstract

By means of a widely used flexible functional form estimated for seven manufacturing industries this paper examines complementarity between energy and capital. The industry level data have been used to avoid the aggregation bias in the estimation of elasticities of substitution as pointed out by Solow (1987). We have disaggregated energy into three energy types viz. electricity, gas and oils as inputs. Elasticities of substitution between capital and energy types are found to be negative in most of the cases, indicating substitutability between capital and energy.

Suggested Citation

  • M. Junaid Khawaja, 1994. "A Contribution to the Energy-Capital Complementarity Debate," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 29(1), pages 91-102, January.
    • Handle: RePEc:dse:indecr:v:29:y:1994:i:1:p:91-102
    as

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    More about this item

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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