Is the Electricity Sector a Weak Link in Development? / Jonathan M. Colmer, David Lagakos, Martin Shu.

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Colmer, Jonathan M

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TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w32041.Publication details: Cambridge, Mass. National Bureau of Economic Research 2024.Description: 1 online resource: illustrations (black and white)Subject(s):

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Abstract: This paper asks whether increasing productivity in the electricity sector can yield larger long-run GDP gains than suggested by electricity's small share of aggregate economic activity. We answer this question using a dynamic multi-sector model in which electricity is a strong complement to other inputs in production. We parameterize the model using our own new measures of electricity-sector TFP across countries. The model predicts modest long-run GDP gains from improving electricity-sector TFP, contrary to the notion that electricity is a weak link. Parameterizations that make electricity a weak link mostly require the electricity sector to be counterfactually large or unproductive.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w32041 (Browse shelf(Opens below))	Not For Loan

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January 2024.

This paper asks whether increasing productivity in the electricity sector can yield larger long-run GDP gains than suggested by electricity's small share of aggregate economic activity. We answer this question using a dynamic multi-sector model in which electricity is a strong complement to other inputs in production. We parameterize the model using our own new measures of electricity-sector TFP across countries. The model predicts modest long-run GDP gains from improving electricity-sector TFP, contrary to the notion that electricity is a weak link. Parameterizations that make electricity a weak link mostly require the electricity sector to be counterfactually large or unproductive.