The underestimated contribution of energy to economic growth
Robert U. Ayres,
Jeroen van den Bergh,
Dietmar Lindenberger and
Structural Change and Economic Dynamics, 2013, vol. 27, issue C, 79-88
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.
Keywords: Economic growth; Energy cost share; Technological constraints; Peak oil; Climate policy (search for similar items in EconPapers)
JEL-codes: D24 O44 Q43 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:27:y:2013:i:c:p:79-88
Access Statistics for this article
Structural Change and Economic Dynamics is currently edited by F. Duchin, H. Hagemann, M. Landesmann, R. Scazzieri, A. Steenge and B. Verspagen
More articles in Structural Change and Economic Dynamics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().