Template-type: ReDIF-Paper 1.0
Author-Name: Antonia Díaz
Author-Email: andiaz@eco.uc3m.es.
Author-Workplace-Name: Universidad Carlos III de Madrid
Author-Name: Luis A. Puch
Author-Email: lpuch@ccee.ucm.es 
Author-Homepage: https://www.ucm.es/fundamentos-analisis-economico2/luis-a-puch
Author-Person: ppu1
Author-Workplace-Name: Universidad Complutense de Madrid, ICAE
Author-Workplace-Homepage: https://www.ucm.es/fundamentos-analisis-economico2
Author-Name: María D. Guilló
Author-Workplace-Name: Universidad de Alicante
Title: Costly capital reallocation and energy use
Abstract: In time series data, energy use does not change much with energy price changes.
	However, energy use is responsive to international differences in energy prices in
	cross-section data across countries. In this paper we consider a model of energy
	use in which production takes place at individual plants and capital can be used
	either to directly produce output or to reduce the energy required to run the planto
	We assume that reallocating capital from one use to another is costly. This turns
	out to be crucial for the quantitative properties of the model to be in conformity
	with the low short-mn and high long-run elasticities of energy use seen in data.
	Furthermore, our model displays variations in capacity utilization that are in line
	with those observed during the period of major oil price increases.
Classification-JEL: E22, E23, Q43
Keywords: Energy price, Energy use, Costly capital reallocation, Number of plants.
Creation-Date: 2001
X-File-Ref: http://america.sim.ucm.es/repec/ucm/ref/doicae0111.txt
File-URL: https://eprints.ucm.es/id/eprint/6795/1/0111.pdf
File-Format: Application/pdf
Handle: RePEc:ucm:doicae:0111