Fields of Interest:
(Green) Growth Theory
Declining Labor Share of Income
Energy System Modeling
I am a research associate at the German Institute for Economic Research (DIW Berlin), Dept. Energy, Transportation, Environment.
Currently, I am searching for a job at the intersection of academia and policy work, preferably in think tanks, international institutions, NGOs, and research institutions.
You can download my CV here.
What Determines the Elasticity of Substitution Between Capital and Labor? A Literature Review
with Michael Knoblach, in: Journal of Economic Surveys (2020)
Abstract: This paper provides the first comprehensive review of the empirical and theoretical literature on the determinants of the elasticity of substitution between capital and labor. Our focus is on the two‐input constant elasticity of substitution (CES) production function. We start by presenting four concise observations that summarize the empirical literature on the estimation of σ. Motivated by these observations, the main part of this survey then focuses on potential determinants of capital-labor substitution. We first review several approaches to the microfoundation of production functions where the elasticity of substitution (EOS) is treated as a purely technological parameter. Second, we outline the construction of an aggregate elasticity of substitution (AES) in a multi‐sectoral framework and investigate its dependence on underlying intra‐ and inter‐sectoral substitution. Third, we discuss the influence of the institutional framework on the extent of factor substitution. Overall, this survey highlights that the effective elasticity of substitution (EES), which is typically estimated in empirical studies, is generally not an immutable deep parameter but depends on a multitude of technological, non‐technological, and institutional determinants. Based on these insights, the final section identifies a number of potential empirical and theoretical avenues for future research.
Is Substitutability the New Efficiency? Endogenous Investment in the Elasticity of Substitution
Between Clean and Dirty Energy
DIW Discussion Paper No. 1886
Abstract: When analyzing potential ways to counter climate change, standard models of green growth abstract from investment in substitutability between "clean" and "dirty" energy inputs. Instead, they rely on the assumption that efficiency with respect to fossil fuels can be increased perpetually. However, this is not in line with observed firm investment behavior and the limits to efficiency imposed by thermodynamic laws. In this paper, I develop a growth model that explicitly accounts for endogenous investment to increase input substitutability, in addition to investment in efficiency. The model predicts that, for a growing economy, there is always investment in both substitutability and efficiency, even without a carbon cap and with non-infinite fossil fuel prices. Most importantly, in the long-run, with sufficient investment in substitutability, fossil fuels become inessential for production. Moreover, the model predicts a declining income share of fossil fuels, an outcome not featured by standard models based on purely efficiency-enhancing technological progress. Overall, the model generates an endogenous path of transition from an economy characterized by a low elasticity of substitution to one characterized by a high elasticity. In doing so, it still nests the results derived from a purely efficiency-based directed technical change framework as a special case. In addition, this paper analyzes the scope for policy intervention, showing that even a temporary subsidy/tax can trigger a full transformation toward green growth.
Substituting Clean for Dirty Energy: A Bottom-Up Analysis
with Alexander Zerrahn, DIW Discussion Paper No. 1885
Abstract: We fit CES and VES production functions to data from a numerical bottom-up optimization model of electricity supply with clean and dirty inputs. This approach allows for studying high shares of clean energy not observable today and for isolating mechanisms that impact the elasticity of substitution between clean and dirty energy. Central results show that (i) dirty inputs are not essential for production. As long as some energy storage is available, the elasticity of substitution between clean and dirty inputs is above unity; (ii) no single clean technology is indispensable, but a balanced mix facilitates substitution; (iii) substitution is harder for higher shares of clean energy. Finally, we demonstrate how changing availability of generation and storage technologies can be implemented in macroeconomic models.
Green Hydrogen: Optimal Supply Chains and Power Sector Benefits
with Wolf-Peter Schill & Alexander Zerrahn, arXiv preprint
Abstract: Green hydrogen can help to decarbonize transportation, but its power sector interactions are not well understood. It may contribute to integrating variable renewable energy sources if production is sufficiently flexible in time. Using an open-source co-optimization model of the power sector and four options for supplying hydrogen at German filling stations, we find a trade-off between energy efficiency and temporal flexibility: for lower shares of renewables and hydrogen, more energy-efficient and less flexible small-scale on-site electrolysis is optimal. For higher shares of renewables and/or hydrogen, more flexible but less energy-efficient large-scale hydrogen supply chains gain importance as they allow disentangling hydrogen production from demand via storage. Liquid hydrogen emerges as particularly beneficial, followed by liquid organic hydrogen carriers and gaseous hydrogen. Large-scale hydrogen supply chains can deliver substantial power sector benefits, mainly through reduced renewable surplus generation. Energy modelers and system planners should consider the distinct flexibility characteristics of hydrogen supply chains in more detail when assessing the role of green hydrogen in future energy transition scenarios.
Work in Progress:
"My eRoads" - Electrification Potential of Freight and Bus Transport
Funding: German Ministry for the Environment, Nature Conservation and Nuclear Safety
Project Partners: IFEU (lead), Fraunhofer IIS, PTV Group, DIW Berlin
Increasing Capital-Labor Substitutability and the Declining Labor Income Share
with Michael Knoblach & Khalid ElFayoumi
Benefits of Hydrogen/Power-to-Liquid Mobility for Integrating Intermittent Renewable Energy
with Wolf-Peter Schill
Hertie School of Governance
Teaching Assistant - Course "Trade, Growth, and Development" with Prof. Dr. Franziska Holz
Prof. Dr. Georg Meran
Professor of Economics, Technische Universität Berlin
Workgroup Environmental Economics and Policy
Straße des 17. Juni 135,
10623 Berlin, Germany
Dr. Wolf-Peter Schill
Deputy Head of Dept. Energy, Transportation, Environment, DIW Berlin
10117 Berlin, Germany
Prof. Dr. Claudia Kemfert
Head of Dept. Energy, Transportation, Environment, DIW Berlin
Professor of Economics, Leuphana Universität Lüneburg
21335 Lüneburg, Germany