Implicit assumptions about time invariance

A first remark concerns the inherent reduced form structure of simple demand specifications since the complex conversion from primary energy to energy services is just lumped into the assumption of a given and timeinvariant technology. If energy is demanded by a consumer then the implicit assumption of invariant preferences with respect to energy services and other items in the bundle of consumer goods has to be made. These assumptions of time-invariant technologies and preferences can only marginally be relaxed by introducing time-dependent variables.

Was this article helpful?

0 0

Post a comment