This contribution aims to examine the relationship between the transport sector and the macroeconomy, particularly in fossil energy use, capital and labour relations. The authors have investigated the transport related fossil fuel consumption 2003 -2010 in a macroeconomic context in Hungary and Germany. The Cobb-Douglas type of production function could be justified empirically, while originating from the general CES (Constant Elasticity of Substitution) production function. Furthermore, as a policy implication, the results suggest that a solution for the for the reduction of anthropogenic CO2 driven by the combustion of fossil fuels presupposes technological innovation to reach emission reduction targets. Other measures, such as increasing the fossil fuel price by levying taxes, would consequently lead to an undesirable GDP decline.
If the inline PDF is not rendering correctly, you can download the PDF file here.
1. Allan G., Hanley N., McGregor P., Swales K., Turner K. (2007): The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom, Energy Economics, 29, p. 779-798.
2. Arrow, K. J., Chenery, H. B., Minhas, B. S. and Solow, R. M. (1961), Capital-Labor Substitution and Economic Efficiency, Review of Economics and Statistics 43, p. 225-250.
3. Avinash K., Stiglitz E. (1977): Monopolistic competition and optimum product diversity, American Economic Review 67 (3), p. 297-308.
4. Beauséjour, L., Lenjosek, G, Smart, M., (1995): A CGE approach to modelling carbon dioxide emissions control in Canada and the US. The World Economy 18, p. 457-489.
5. Bergman, L., (1988): Energy policy modelling: a survey of general equilibrium approaches. Journal of Policy Modelling 10, p. 377-399.
6. Cobb, C. W., Douglas, P. H. (1928): A Theory of Production. American Economic, Review Supplement 18: p. 139-165.
7. Conrad, K., (1999): Computable general equilibrium models for environmental economics and policy analysis. In: van den Bergh, J.C.J.M. (Ed.), Handbook of Environmental and Resource Economics. Edward Elgar Publishing Ltd, Cheltenham.
8. Conrad, K., Schröder, M., (1993): Choosing environmental policy instruments using general equilibrium models. Journal of Policy Modelling 15, p. 521-543.
9. de Brown, M. and de Carni, J. S. (1963), Technological Change and the Distribution of Income, International Economic Review 3, p. 289-309.
10. Despotakis, K.A., Fisher, A.C., (1988): Energy in a regional economy: a computable general equilibrium model for California. Journal of Environmental Economics and Management 15, p.313-330.
11. Domanovszky, H. (2014). Gas propulsion or e-mobility is the solution on the way of clean and carbon free road transportation? Periodica Polytechnika Transportation Engineering, 42(1), 63-72.
12. Goulder, L.H., (1998): Effects of carbon taxes in an economy with prior tax distortions: an intertemporal general equilibrium analysis. Journal of Environmental Economics and Management 29, p271-297.
13. Kerepesi K, Romvári E. (1993): Economics for Engineers [in Hungarian: Közgazdaságtan mérnököknek], Müegyetemi Kiadó, Budapest, p.471.
14. Lee, H., Roland-Holst, D.W., (1997): Trade and the environment. In: Francois, J.F., Reihert, K.A. (Eds.), Applied Methods for Trade Analysis: A Handbook. Cambridge University Press, Cambridge.
15. Li, P., Rose, A., (1995): Global warming policy and the Pennsylvania economy: a computable general equilibrium analysis. Economic Systems Research, 7, p.151-171.
16. Maeda A., (2010): Estimating the Impact of GHG Target-Setting on the Macroeconomy, Kyoto Sustainability Initiative, Kyoto University
17. Mitsakis, E., Papanikolaou, A., Ayfadopoulou, G., Salanova, J., Doll, C, Giannopoulos, G., & Zerefos, C. (2014). An integrated framework for linking climate change impacts to emergency adaptation strategies for transport networks. European Transport Research Review, 6(2), 103-111.
18. Saito T. (2011): The Algebra of Convergence from CES to Cobb-Douglas and Leontief Lecture Notes State University of New York at Buffalo.
19. Saunders, H. D. (2008): Fuel conserving (and using) production functions, Energy Economics 30, p.2184-2235.
20. Siwale, L., Kristóf, L., Adam, T., Bereczky, A., Penninger, A., Mbarawa, M., & Andrei, K. (2013). Performance Characteristics of n-Butanol-Diesel Fuel Blend Fired in a Turbo-Charged Compression Ignition Engine. Journal of Power and Energy Engineering, 1(05), p.77-83.
21. Solow, R. (1956), A Contribution to the Theory of Economic Growth, Quarterly. Journal of Economics 70, p.65-94.
22. Spence, M. (1976): Product selection, fixed costs, and monopolistic competition, Review of Economic Studies 43 (2), p.217-35.
23. Szendrö, G., & Török, Á. (2014). Theoretical investigation of environmental development pathways in the road transport sector in the European Region. Transport, 29(1), p. 12-17.
24. Temple J. (2012): The calibration of CES production functions, Journal of Macroeconomics 34 p.294-303.
25. Torok A. (2014): Environmental Comparism Of Road And Railway Transport: A Case Study In Hungary, Inetrnational Journal for Traffic and Transport Engineering, 4(2):210-219 doi: 10.7708/ijtte.2014.4(2).07
26. van der Werf E. (2007): Production Functions for Climate Policy Modelling: An Empirical Analysis, Kiel Working Paper No. 1316, Research Paper, Kiel Institute for the World Economy, Duesternbrooker Weg 120, 24105 Kiel (Germany), p.31.
27. Vass, S., Németh, H. (2013). Sensitivity analysis of instantaneous fuel injection rate determination for detailed Diesel combustion models. Periodica Polytechnika Transportation Engineering, 41(1), p.77-85.
28. Wei T. (2006): Impact of energy efficiency gains on output and energy use with Cobb-Douglas production function, Energy Policy, 35, p.2023-2030.
29. Xu Y, Masui T (2008): Local air pollutant emission reduction and ancillary carbon benefits of SO2 control policies: Application of AIM/CGE model to China, European Journal of Operational Research 198, p. 315-325.