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

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URL:	https://ub-madoc.bib.uni-mannheim.de/35209
URN:	urn:nbn:de:bsz:180-madoc-352093
Document Type:	Working paper
Year of publication:	2013
The title of a journal, publication series:	ZEW Discussion Papers
Volume:	13-087
Place of publication:	Mannheim
Publication language:	English
Institution:	Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series:	Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject:	330 Economics
Classification:	JEL: O44 , O47 , Q54 , Q58,
Keywords (English):	Clean and dirty energy inputs , aggregate elasticity of substitution , CES function , cross-country sectoral data , environmental policy
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.

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BASE: Papageorgiou, Chris ; Saam, Marianne ; Schulte, Patrick

Google Scholar: Papageorgiou, Chris ; Saam, Marianne ; Schulte, Patrick

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