In this article, we analyze the transition dynamics, what Hicks called the traverse, from one equilibrium toward another one—and the conditions for such a transfer—in a bi-sectoral economy under technological shocks.
To this end, we revisit the Hick Traverse model and add to it intersectoral relations in the form of intersectoral consumption of energy for both the energy and the manufacturing sector. We investigate two distinct assumptions about consumption behavior of manufactured goods. We show that our model extends Hicks’ one and leads to the same condition for a good traverse path, independently from the net energy return. We highlight that energy production technologies nevertheless provide constrains on viable states of the economy and its maximal growth rate, and that energy consumption technologies impact investment and prices crucially.
Adrien Nguyen-Huu (Université de Montpellier) et Antonin Pottier (EHESS) sont chercheurs associés à la Chaire Energie et Prospérité.
Understanding the mechanisms of deforestation is necessary in order to slow or arrest its progress. To accomplish this requires rigorously estimating the demand for deforestation. We contribute to this endeavor by estimating the effect of crop prices on the demand for conversion of land from forest to agriculture in the tropics during the 21st...
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