INDUSTRIAL ENERGY SUBSTITUTION DURING THE 1980S IN THE GREEK ECONOMY

Factor substitution in Greek manufacturing during the 1980s is examine d, using pooled data in static and dynamic translog expenditure share models. Inputs are capital, labor, electricity and non-electrical ener gy (liquid, solid, gas). Own-price elasticities for capital and labor are inelastic, but for electricity more elastic (-0.90). Results indic ate substitutability among factors in the short run. In the long run, electricity and capital are complements, as are labor and non-electric al energy. Greek manufacturing is predicted to continue decreased cons umption of liquid fuels to the year 2000, continuing the electrificati on begun in the 1970s. (C) 1997 Elsevier Science B.V.