or in terms of per capita where E is commercial energy consumption, G is gross national product (GNP) and N is population; K, 8 and p are constants; 8, p are the income elasticities of consumption. If this model held, then plots of the relevant parameters describing energy use and income would give straight lines on a log scale. The trajectories on a per capita basis are shown in Figure 1. It is clear that this simple model does have greater explanatory power despite being unfashionable. The country trajectories lie within a rather narrow corridor. One way of estimating the change in behaviour since the first oil shock is to take cross-country behaviour as a measure of the “norm” elasticity and to measure of individual country elasticities measured from their own time series compare from the norm. This approach assumes that cross-country elasticity measures the relationship between energy and output as it built up over the long historical period in which the country differentiation’s were established, whereas time series elasticities measure post oil shock behaviour. If there have been significant behavioral shifts from the historical norm then the time series elasticities will be different from the crosscountry elasticity. If economic development were simply a progression along a determined path which was followed at different speeds by different countries then the cross-country and time series elasticities should be roughly similar. If countries have now moved on to a more energy conservative track than the historical track characterizing the separation between countries, then time series elasticities should be below cross-sectional elasticities.
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