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This article examines energy consumption in Sweden, Holland, Italy and Spain over 200 years, including both traditional and modern energy carriers. The analysis is based on totally new series of energy consumption including traditional carriers along with modern sources. Our main purposes are a closer examination of the process of the energy transition in Europe and a revision of the prevailing idea of there being, over the long run, an inverted U-curve in energy intensity. Changes in energy consumption are decomposed into effects from population growth, economic growth and energy intensity. The results on energy intensity challenge the previous suggestions of most scholars. An inverted U-curve does not exist whenever we include traditional sources of energy in our analysis.

The expansion in the supply of energy services over the last couple of centuries has reduced the apparent importance of energy in economic growth despite energy being an essential production input. We demonstrate this by developing a simple extension of the Solow growth model, which we use to investigate 200 years of Swedish data. We find that the elasticity of substitution between a capital-labor aggregate and energy is less than unity, which implies that when energy services are scarce they strongly constrain output growth resulting in a Malthusian steady-state. When energy services are abundant the economy exhibits the behavior of the "modern growth regime" with the Solow model as a limiting case. The expansion of energy services is found to be a major factor in explaining the industrial revolution and economic growth in Sweden, especially before the second half of the 20th century. In the latter period, labor-augmenting technological change becomes the dominant factor driving growth.JEL Codes: O13, O41, Q43, Q56

The expansion in the supply of energy services over the last couple of centuries has reduced the apparent importance of energy in economic growth despite energy being an essential production input. We demonstrate this by developing a simple extension of the Solow growth model, which we use to investigate 200 years of Swedish data. We find that the elasticity of substitution between a capital-labor aggregate and energy is less than unity, which implies that when energy services are scarce they strongly constrain output growth resulting in a Malthusian steady-state. When energy services are abundant the economy exhibits the behavior of the "modern growth regime" with the Solow model as a limiting case. The expansion of energy services is found to be a major factor in explaining the industrial revolution and economic growth in Sweden, especially before the second half of the 20th century. In the latter period, labor-augmenting technological change becomes the dominant factor driving growth.JEL Codes: O13, O41, Q43, Q56

No abstract