The importance of energy price stickiness and real wage inflexibility for the time paths of rebound effects

Figus, Gioele and McGregor, Peter G and Swales, J Kim and Turner, Karen (2018) The importance of energy price stickiness and real wage inflexibility for the time paths of rebound effects. Discussion paper. University of Strathclyde, Glasgow.

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    Abstract

    There has been some controversy over the relative sizes of the short- and long-run rebound effects associated with energy efficiency improvements. Theoretical analysis by Wei (2007) and Saunders implied that the rebound effects would always be greater in the long-run than in the short-run. However, Allan et al (2007) and Turner (2009) found evidence from Computable General Equilibrium simulations that contradicted this result. In this paper we systematically explore the impact of energy price stickiness and real wage inflexibility for the evolution of rebound effects. We find that: the degree of energy price, but not wage, stickiness is an important determinant of the time path of rebound effects and of its relative size in the short- and long-runs; and that there is considerable variation in the scale of rebound effects through time, even where short-run rebound effects are lower than in the long-run. However, the most significant finding overall is that rebound reflects the system-wide interaction between energy producing and energy using sectors.

    Author(s):Figus, Gioele ORCID logoORCID: https://orcid.org/0000-0002-2642-5504, McGregor, Peter G ORCID logoORCID: https://orcid.org/0000-0003-1221-7963, Swales, J Kim and Turner, Karen
    Item type:Monograph(Discussion paper)
    ID code:64434
    Keywords:energy efficiency, evolution of energy rebound, price stickiness, real wage inflexibility, Economic Theory, Economics, Econometrics and Finance(all)
    Subjects:Social Sciences > Economic Theory
    Department:Faculty of Humanities and Social Sciences (HaSS) > International Public Policy Institute (IPPI)
    Strathclyde Business School > Fraser of Allander Institute
    Strategic Research Themes > Energy
    Faculty of Humanities and Social Sciences (HaSS) > School of Government and Public Policy > Politics
    Strathclyde Business School > Economics
    Depositing user: Pure Administrator
    Date deposited:12 Jun 2018 15:05
    Last modified:11 Jan 2020 03:10
    URI:https://strathprints.strath.ac.uk/id/eprint/64434
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