Abstract
This study investigates the impact of inflationary expectations on the demand for capital, labor, and energy in Canadian manufacturing industries using translog cost functions. After adjusting the price of capital services for inflationary expectations, the primary focus is placed on the elasticities of demand for energy and the cross-elasticities between energy and capital and labor services. This enables us to pinpoint sectors that will have the most difficulty adapting to high energy prices and to predict how they will cope (e.g., by increasing capital or labor).
This research was partially supported by the Imperial Oil Company of Canada, Ltd., and by the Humanities and Social Sciences Grants Committee of the University of British Columbia. Thanks go to Professors W. E. Diewert and W. T. Ziemba for helpful discussions as this research evolved.
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© 1980 Martinus Nijhoff Publishing
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Cameron, T.A., Schwartz, S.L. (1980). Inflationary Expectations and the Demand for Capital, Labor, and Energy in Canadian Manufacturing Industries. In: Ziemba, W.T., Schwartz, S.L., Koenigsberg, E. (eds) Energy Policy Modeling: United States and Canadian Experiences. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-8748-7_4
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DOI: https://doi.org/10.1007/978-94-009-8748-7_4
Publisher Name: Springer, Dordrecht
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