Non-linear technological progress and the substitutability of energy for capital: An application using the translog cost function.

David Clive Broadstock

Research output: Journal article publicationJournal articleAcademic researchpeer-review

2 Citations (Scopus)


This paper analyses the production process of three industries over three separate time periods using datasets taken form Berndt and Wood (1975, 1979), Hunt (1984a, 1986) and Norsworthy and Harper (1981). In their initial paper Berndt and Wood failed to explore the alternative options available to them to represent technological progress, a deficiency noted by Hunt (1986) who tested for alternative representations of technology (inter alia) using the Berndt and Wood data. This paper extends this line of reasoning/research by allowing technological progress to take more flexible non-linear forms using a polynomial deterministic trend model. The results reveal that 'non-linear trend' models are generally preferred to 'linear trend' or 'no trend' models hence raising a question over the validity of assumptions used in much previous empirical research. Further the results reveal that the different assumptions lead to different results for the energy-capital elasticity of substitution.
Original languageEnglish
Pages (from-to)84-93
Number of pages10
JournalEconomics Bulletin
Issue number1
Publication statusPublished - 21 Jun 2010
Externally publishedYes

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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