Title: The role of energy in production functions

Authors: Sylvie Faucheux

Addresses: Universite du Maine and Centre Economie Espace Environnement Universite Paris I Pantheon-Sorbonne, France

Abstract: The increase in the greenhouse effect, in which carbon dioxide (CO2) plays a major role, poses once more the problem of an energy constraint on growth, a problem which had virtually been forgotten ever since the decrease in energy prices in the early 1980s. Economic theory has at its disposal, through KLEM functions, a set of fairly reliable instruments, which allow it to measure the repercussions as well as the ways of countering an energy constraint on growth. However, despite the increasing sophistication of production functions with energy input, we are still very much lacking In knowledge as to the long-term substitutability of energy and capital, the technical progress/energy linkage and the ways in which we can take the thermodynamic specificity of energy input into account.

Keywords: energy policy; environment; flexible functional form; Fourier functional form; greenhouse effect; KLEM function; linex function; macro-energetic models; natural resources; production function; substitutability; technical progress; translog.

DOI: 10.1504/IJGEI.1993.063630

International Journal of Global Energy Issues, 1993 Vol.5 No.1, pp.44-55

Published online: 17 Jul 2014 *

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