A special issue of Energy Policy-28 (2000)-was devoted to a collection of papers, edited by Dr. Lee Schipper. The collection included a paper entitled "A view from the macro side: rebound, backfire, and Khazzoom-Brookes" in which it was argued that the impact of fuel efficiency gains on output (roughly, GDP) is likely to be relatively small by Cobb-Douglas production function. However, an error in the analysis leads to under-estimation of the long-term impact. This paper first provides a partial equilibrium analysis by an alternative method for the same case and then proceeds to an analysis on the issue in a two-sector general equilibrium system. In the latter analysis, energy price is internalized. Both energy use efficiency and energy production efficiency are involved. (c) 2006 Elsevier Ltd. All rights reserved.