Energy price increases stifle capital-energy substitution, hindering economic growth.
The study looked at how businesses can switch between using capital and energy in their production processes. They found that while it is technically possible to substitute capital for energy, in reality, businesses don't do it much because energy price increases make it less profitable. This effect is stronger in the short and medium term, but in the long run, businesses do start to change their capital use in response to energy prices.