Energy Price Induced and Exogenous Technological Changes : Assessing Economic and Environmental Outcomes

This study distinguishes factor/output substitution and shift of production technology frontiers. Our model includes by-product of carbon dioxide and sulfur dioxide emissions, in which the function requires the simultaneous reductions of the emissions and expansion of good outputs. On world average, we observe substantial energy price induced technological progress when the long-term oil prices were rising, although the growth rate is more volatile in developed countries than developing countries. The results also show that the developed countries experience higher exogenous technological progress in comparison to developing countries and the gaps between the groups have increased over study periods