Template-Type: ReDIF-Paper 1.0
Author-Name: Gioele  Figus
Author-Name-First: Gioele 
Author-Name-Last: Figus
Author-Email: gioele.figus@strath.ac.uk
Author-Workplace-Name: Centre for Energy Policy, University of Strathclyde
Author-Name: Peter McGregor
Author-Name-First: Peter
Author-Name-Last: McGregor
Author-Email: p.mcgregor@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: J Kim Swales
Author-Name-First: J Kim
Author-Name-Last: Swales
Author-Email: j.k.swales@strath.ac.uk
Author-Workplace-Name: Department of Economics, University of Strathclyde
Author-Name: Karen Turner
Author-Name-First: Karen
Author-Name-Last: Turner
Author-Email: karen.turner@strath.ac.uk
Author-Workplace-Name: Centre for Energy Policy, University of Strathclyde
Title: The importance of energy price stickiness and real wage inflexibility for the time paths of rebound effects 
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.
Length: 33 pages
Creation-Date: 2018-03
Revision-Date: 
Publication-Status: Published
File-URL: https://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/18-04.pdf
File-Format: Application/pdf
Number: 1804
Classification-JEL: C68, D58, Q43, Q48
Keywords: energy efficiency, evolution of eneregy rebound, price stickiness, real wage inflexibility
Handle: RePEc:str:wpaper:1804