Elasticity of substitution between clean and dirty energy inputs: A macroeconomic perspective

Chris Papageorgiou, Marianne Saam () and Patrick Schulte

No 13-087, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

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.

Keywords: clean and dirty energy inputs; aggregate elasticity of substitution; CES function; cross-country sectoral data; environmental policy (search for similar items in EconPapers)
JEL-codes: O44 O47 Q54 Q58 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ene, nep-env, nep-mac and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/88124/1/77193811X.pdf (application/pdf)

Related works:
Working Paper: Elasticity of Substitution between Clean and Dirty Energy Inputs - A Macroeconomic Perspective (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13087

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().