The economic growth enigma: Capital, labour and useful energy?

Ayres, Robert U.; Voudouris, Vlasios

doi:10.1016/j.enpol.2013.06.001

Cited by 116 publications

(61 citation statements)

References 13 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…In particular, this is much higher than the cost share of oil, which is usually less than 3%. Our finding confirms the standpoint that has been defended by several authors, including Ayres, Kümmel, Lindenberger and Voudouris (see [KL10], [K11] and [AV14]), according to whom the importance of energy in the fabric of economic growth is amply underestimated in the traditional Solovian approach.…”

Section: Introductionsupporting

confidence: 80%

The effects of oil price shocks in a new-Keynesian framework with capital accumulation

et al. 2015

View full text Add to dashboard Cite

The economic implications of oil price shocks have been extensively studied since the 1970s'. Despite this huge literature, no dynamic stochastic general equilibrium model was available that captures two well-known stylized facts: 1) the stagflationary impact of an oil price shock, together with 2) the influence of the energy productivity of capital on the depth and length of this impact. We build, estimate and simulate a New-Keynesian model with capital accumulation, which takes the case of an economy where oil is imported from abroad, and where these stylized facts can be accounted for. Moreover, the Bayesian estimation of the model on the US economy suggests that the output elasticity of oil might have been above 10%, stressing the role of oil use in US growth at this time. Finally, our simulations confirm that an increase in energy efficiency significantly attenuates the effects of an oil shock -a possible explanation of why the third oil shock (1999)(2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008) did not have the same macro-economic impact as the first two ones. JEL Codes : C68, E12, E23, Q43

show abstract

Section: Introductionsupporting

confidence: 80%

The effects of oil price shocks in a new-Keynesian framework with capital accumulation

et al. 2015

View full text Add to dashboard Cite

show abstract

“…Declining EROI for dominant fuels threatens to reduce the availability of energy for purposes other than obtaining energy, hence, arguably, making it more difficult for societies to direct sufficient energy to satisfying human needs and desires (e.g., for food, health care, leisure), and to achieve economic growth (Ayres and Voudouris, 2014;Hall et al, 2014). A pertinent question for policy makers is hence whether new technologies, such as those 7 Indeed we add together the different CEDs ourselves in the numerical examples ( Fig.…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

“…If the energy required to deliver energy becomes large at the societal level, there may be too little energy surplus available for other activities or insufficient usable energy to drive economic growth (Ayres and Voudouris, 2014;Cleveland et al, 1984;Hall and Cleveland, 1981). In the literature, there is widespread concern that net energy returns for oil and gas are declining and likely to continue declining (e.g., Dale et al (2011), Grandell et al (2011), Poisson and Hall (2013), Brandt et al (2013)).…”

Section: Introductionmentioning

confidence: 99%

More caution is needed when using life cycle assessment to determine energy return on investment (EROI)

Arvesen¹,

Hertwich²

2015

Energy Policy

View full text Add to dashboard Cite

KeywordsPrimary energy; Cumulative energy demand; LCA. Highlights• LCA can be used to determine EROI, but misclassification of energy flows can occur • Supply chain losses included in LCA need to be adjusted for when determining EROI • Inconsistencies in heating value assumptions in LCA databases have misled analysts • Differential weighting of primary energy forms in LCA-EROI should be reconsidered AbstractCumulative energy demand (CED) estimates from life cycle assessments (LCAs) are increasingly used to determine energy return on investment (EROI), but the difference in indicators can lead to a misclassification of energy flows in the assessment. The core idea of EROI is to measure the relation of energy diverted from society to make energy available to society. CED, on the other hand, includes forms of energy that are not appropriated by society, such as fugitive methane emissions from oil wells as well as losses of heating value of coal during transport and storage. Such energy forms should be excluded from EROI; failure to do so leads to results that are inconsistent with the intention of EROI and potentially misleading. We demonstrate how this problem is at least partially rectifiable by adopting consistent energy accounting, but also note that among the energy flows not appropriated by society occurring in CED, not all flows can easily be removed. Further, we point to inconsistencies in heating value assumptions in a widely used database that have misled analysts. Finally, we argue that the differential weighting of primary energy forms in published CED-based EROI work is unsubstantiated and should be reconsidered.

show abstract

“…The GAIC(c) = −2×l+c×edf , where l is the log-likelihood function of the model and edf are the effective degrees of freedom of a fitted model (the dimension of the vector of model parameters). Ayres and Voudouris (2014) provide a detailed example of how to chose the distribution for the generalised production function.…”

Section: The Generalised (Semi-parametric) Production Functionmentioning

confidence: 99%

“…Following Ayres and Voudouris (2014), we start with a general model of an economy that is an extension of the standard neoclassical growth model. It has one output Y and multiple inputs.…”

Section: The Generalised (Semi-parametric) Production Functionmentioning

confidence: 99%

The economic growth enigma revisited: The EU-15 since the 1970s

et al. 2015

Self Cite

View full text Add to dashboard Cite

Current macro-econometric models mostly incorporate just two factors of production, labor and capital (with a time-dependent multiplier representing technological change or total factor productivity). These models assume that energy is an intermediate product of some combination of human labor and capital. These models also assume that the supply of energy is driven by economic demand. We assume the contrary, i.e. that useful energy is a primary input, derived (mostly) from natural capital. This failure to capture the impact of primary resources (as useful energy) on economic growth leads to inappropriate formulation of economic growth theories. To understand that impact better we need explicit evidence of marginal products of capital, labor and useful energy or useful work. As applied to the explanation of the past half century of economic growth of the EU-15 countries, the new results demonstrate the use of non-parametric relationships between capital, labor and useful energy to explain economic growth. They also indicate that marginal products of capital, labor and useful energy are variablethe marginal product depends on the levels of capital stock, labor input and useful energy flows. The proposed semi-parametric production function suggests country-specific policy implications for the EU (and other countries).

show abstract

The economic growth enigma: Capital, labour and useful energy?

Cited by 116 publications

References 13 publications

The effects of oil price shocks in a new-Keynesian framework with capital accumulation

The effects of oil price shocks in a new-Keynesian framework with capital accumulation

More caution is needed when using life cycle assessment to determine energy return on investment (EROI)

The economic growth enigma revisited: The EU-15 since the 1970s

Contact Info

Product

Resources

About