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I've read a number of papers on factor - augmenting technical progress and directed technical change. Authors do not note about the implications of factor - augmentation in sufficient details. Assume production technology is of CES type where inputs are Labour, Capital stock and Energy. If technological progress is induced, then it is possible that endogenous changes in innovations lead to capital - saving, labour - saving and energy - saving technical progress.

While it is easy to see what labour - saving innovations could be, I wonder what the differences in capital - saving and energy - saving innovations could be. Is not energy - saving innovation a capital - saving innovation? In other words, efficiency of capital is analogous to energy efficiency, is not it?

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  • $\begingroup$ Don't energy-saving measures often involve increasing the amount of capital? $\endgroup$ – EnergyNumbers May 6 '16 at 5:51
  • $\begingroup$ I understand this, energy-saving innovations increase the efficiency of capital stock, then what is capital - saving innovation? $\endgroup$ – london May 6 '16 at 8:56

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