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Energy and capital: Substitutes or complements! A note on the importance of testing for non-neutral technical progress

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This note investigates the importance of testing the validity of the Hicks-neutral technical progress assumption in the context of examining the substitutability or complementarity between capital, labour and energy in the UK industrial sector. It is found that the hypothesis of neutral technical progress must be rejected in favour of the non-neutral hypothesis: with technical progress thus biased to using both capital and energy but to saving labour. In addition, it is found that all three factors are substitutable for one another when non-neutral technical progress is modelled.

Original languageEnglish
Pages (from-to)729-735
Number of pages7
JournalApplied Economics
Volume18
Issue number7
DOIs
Publication statusPublished - 1 Jul 1986

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