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Energy Saving Technological Progress in a Vintage Capital Model

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  • Agustin, PEREZ-BARAHONA

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Benteng, ZOU

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

Fossil fuel is an essential input throughout all modern economies. The reduced availability of this basic input to production, and the stabilization of greenhouse gases concentration - which requires reductions in fossil fuel energy use - would have a negative impact in GDP and economic growth through cutbacks in energy use. However, this trade-off between energy reduction and growth could be less severe if energy conservation is raised by ernergy saving technologies. Here we study this hypothesis and, in particular, the effect of tax over the energy expenditure of firms as a way to promote investments in energy saving technologies. To this we consider a general equilibrium model with embodied and exogenous energy saving technological progress in a vintage capital framework, where the scrapping rule is endogenous and linear simplifications are eliminated.

Suggested Citation

  • Agustin, PEREZ-BARAHONA & Benteng, ZOU, 2003. "Energy Saving Technological Progress in a Vintage Capital Model," LIDAM Discussion Papers IRES 2003026, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2003026
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    1. Raouf Boucekkine & David de la Croix & Omar Licandro, 2006. "Vintage Capital," Economics Working Papers ECO2006/8, European University Institute.
    2. Boucekkine, Raouf & Germain, Marc & Licandro, Omar, 1997. "Replacement Echoes in the Vintage Capital Growth Model," Journal of Economic Theory, Elsevier, vol. 74(2), pages 333-348, June.
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    6. Boucekkine, Raouf & Pommeret, Aude, 2004. "Energy saving technical progress and optimal capital stock: the role of embodiment," Economic Modelling, Elsevier, vol. 21(3), pages 429-444, May.
    7. Petith, Howard C, 1976. "The Stolper Samuelson Theorem, the Rybczynski Theorem, and the Pattern of Trade in Neoclassical and Vintage Capital Trade and Growth Models," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(1), pages 57-75, February.
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    11. BOUCEKKINE, Raouf & GERMAIN, Marc & LICANDRO, Omar, 1996. "General Equilibrium Vintage Capital Growth Models Displaying Periodic Solutions : A Theoretical Example," LIDAM Discussion Papers CORE 1996032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    14. Carraro, Carlo & Gerlagh, Reyer & Zwaan, Bob van der, 2003. "Endogenous technical change in environmental macroeconomics," Resource and Energy Economics, Elsevier, vol. 25(1), pages 1-10, February.
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    Cited by:

    1. Yuan, Chaoqing & Liu, Sifeng & Wu, Junlong, 2009. "Research on energy-saving effect of technological progress based on Cobb-Douglas production function," Energy Policy, Elsevier, vol. 37(8), pages 2842-2846, August.
    2. Perez-Barahona, Agustin & Zou, Benteng, 2006. "A comparative study of energy saving technical progress in a vintage capital model," Resource and Energy Economics, Elsevier, vol. 28(2), pages 181-191, May.

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    More about this item

    Keywords

    Environment; Nonrenewable resources; Eneregy; Energy saving;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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