The underestimated contribution of energy to economic growth

Ayres RU, van den Bergh JCJM, Lindenberger D, & Warr B (2013). The underestimated contribution of energy to economic growth. Structural Change and Economic Dynamics: 79-88. DOI:10.1016/j.strueco.2013.07.004.

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Abstract

Standard economic theory regards capital and labour as the main factors of production that satisfy the "cost-share theorem." This paper argues that when a third factor, namely energy, is added physical constraints on substitution among the factors arise. We show that energy is a much more important factor of production than its small cost share may indicate. This implies that continued economic growth along the historical trend cannot safely be assumed, notably in view of considerably higher energy prices in the future due to peak oil and climate policy.

Item Type: Article
Uncontrolled Keywords: Climate policy; Economic growth; Energy cost share; Peak oil; Technological constraints
Research Programs: Institute Scholars (INS)
Bibliographic Reference: Structural Change and Economic Dynamics; 27:79-88 (December 2013) (Published online 22 August 2013)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:48
Last Modified: 29 Aug 2016 13:54
URI: http://pure.iiasa.ac.at/10325

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