Fickle Fossils. Economic Growth, Coal and the European Oil Invasion, 1900-2015

Miriam Fritzsche and Nikolaus Wolf
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Miriam Fritzsche: HU Berlin

No 465, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Fossil fuels have shaped the European economy since the industrial revolution. We use new long-run panel data to analyse the effect of both, coal and oil on economic growth between 1900 and 2015, exploiting variation at the level of European NUTS2 and NUTS3 regions. We show that the reversal of fortune of coal regions resulted from the second energy transition. Specifically, an “oil invasion” in the early 1960s turned regional coal abundance from a blessing into a curse. Human capital accumulation contributed to this reversal of fortune and fully explains the negative effects until today. Moreover, we find substantial heterogeneity between former coal regions that is in line with Glaeser’s “reinvention hypothesis”: regions with a higher skill-level adjusted much better to the decline of coal. In particular, we show that coal regions with a higher urban density before 1800 were much more resilient than others.

Keywords: coal; oil invasion; second energy transition; education; reinvention; growth (search for similar items in EconPapers)
JEL-codes: I25 N14 O13 O44 Q32 R10 (search for similar items in EconPapers)
Date: 2023-11-25
New Economics Papers: this item is included in nep-eec, nep-ene, nep-env, nep-eur and nep-his
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Related works:
Working Paper: Fickle Fossils. Economic Growth, Coal and the European Oil Invasion, 1900-2015 (2023)
Working Paper: Fickle Fossils. Economic Growth, Coal and the European Oil Invasion, 1900-2015 (2023)
Working Paper: Fickle Fossils. Economic Growth, Coal and the European Oil Invasion 1900-2015 (2022)
Working Paper: Fickle Fossils. Economic Growth, Coal and the European Oil Invasion, 1900-2015 (2022)
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