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Trade-off between labor productivity and capital accumulation in Italian energy sector

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  • Travaglini, Giuseppe
Abstract
This work provides an explanation for the puzzling trade-off between labor productivity and capital accumulation, occurred in Italian energy sector from the late 1980s onwards. By using a vector autoregressive model, we decompose labor productivity into technological and non technological shocks. We find that: (1) labor productivity responds positively to technological shocks, leading to a transition from one equilibrium to another; (2) capital accumulation shows a persistent decline in response to a positive technological shock, revealing that, in energy sector, technology and capital stock are substitutes. From our analysis we get some policy lessons. The obtained results point out the importance of a comprehensive strategy aimed at increasing technological progress through research, innovation and human capital investment in energy sector. Conversely, our findings state that institutional reforms and changes in regulation can only have a transitory effect on labor productivity in energy sector, without permanent gains in the future.

Suggested Citation

  • Travaglini, Giuseppe, 2012. "Trade-off between labor productivity and capital accumulation in Italian energy sector," Journal of Policy Modeling, Elsevier, vol. 34(1), pages 35-48.
    • Handle: RePEc:eee:jpolmo:v:34:y:2012:i:1:p:35-48
    DOI: 10.1016/j.jpolmod.2011.07.013
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    Cited by:

    1. Calcagnini, Giorgio & Giombini, Germana & Travaglini, Giuseppe, 2016. "Modelling energy intensity, pollution per capita and productivity in Italy: A structural VAR approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 1482-1492.
    2. Travaglini, Giuseppe & Rugiero, Serena, 2011. "Efficienza energetica: misurazioni e impatti [Energy efficiency: measurement and impacts]," MPRA Paper 34520, University Library of Munich, Germany.
    3. Travaglini, Giuseppe & Saltari, Enrico, 2012. "A model of waste control and abatement capital: Permanent versus temporary environmental policies," MPRA Paper 36522, University Library of Munich, Germany.
    4. Calcagnini, Giorgio & Travaglini, Giuseppe, 2014. "A time series analysis of labor productivity. Italy versus the European countries and the U.S," Economic Modelling, Elsevier, vol. 36(C), pages 622-628.
    5. Bono, Filippa & Giacomarra, Marcella, 2016. "The photovoltaic growth in the European Union requires stronger RES support," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 324-339.
    6. Wang, Yibo, 2023. "Exploring resource endowment and human capital impact on regional energy efficiency in China in the context of COP26," Resources Policy, Elsevier, vol. 81(C).
    7. Rodríguez, Miguel & Pena-Boquete, Yolanda, 2017. "Carbon intensity changes in the Asian Dragons. Lessons for climate policy design," Energy Economics, Elsevier, vol. 66(C), pages 17-26.
    8. Saltari, Enrico & Travaglini, Giuseppe, 2011. "Optimal abatement investment and environmental policies under pollution uncertainty," MPRA Paper 35072, University Library of Munich, Germany.

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    More about this item

    Keywords

    Energy sector; SVAR; Productivity; Shocks;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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