Energy Input Interaction in US Output

Authors

  • Cassandra Copeland Oglethorpe University
  • Henry Thompson Auburn University

DOI:

https://doi.org/10.15353/rea.v14i4.3631

Keywords:

energy interaction; factor productivity; factor price elasticity

Abstract

This paper estimates production functions for annual US output from 1949 to 2013 adding energy Btu input to fixed capital assets and the labor force.  Interactions between inputs are parsimoniously introduced in the error correction estimates.  Fixed capital assets successfully imbed technology.  Energy and capital are weak substitutes or complements due to their positive interaction.  Energy is substantially underpaid relative to its increasing productivity while labor is increasingly overpaid relative to its declining productivity.  Factor price elasticities involving labor and the wage are noticeably strong.  The nearly elastic own wage effect explains the challenges facing labor.

Author Biography

Cassandra Copeland, Oglethorpe University

Professor, Department of Economics

Downloads

Published

2022-12-20

Issue

Vol. 14 No. 4 (2022)

Section

Articles

License

Copyright (c) 2022 Cassandra Copeland, Henry Thompson

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

The Review of Economic Analysis is committed to the open exchange of ideas and information. 

Unlike traditional print journals which require the author to relinquish copyright to the publisher, The Review of Economic Analysis requires that authors release their work under Creative Commons Attribution Non-Commercial license. This license allows anyone to copy, distribute and transmit the work provided the use is non-commercial and appropriate attribution is given. 

A 'human-readable' summary of the licence is here and the full legal text is here.