Circular dynamics of energy

Reza Aghdam and Nisar Ahmad

Chapter 13 in Elgar Encyclopedia of Energy Economics, 2025, pp 53-55 from Edward Elgar Publishing

Abstract: This entry explores the relationship between energy use and economic development, emphasising the implications for national policies. It reviews the extensive literature on the energy–welfare nexus, which often focuses on the causality between energy consumption and economic growth. Four primary hypotheses are discussed: growth, conservation, feedback, and neutrality, each with distinct policy implications. The seminal work of Kraft and Kraft (1978) identified unidirectional causality from economic output to energy consumption for the USA, supporting the conservation hypothesis. However, varied findings in subsequent studies highlight the dynamic and non-linear nature of this relationship over time, influenced by structural changes, technological advancements, and external shocks. The entry proposes that understanding the circular dynamics and sustainability of the energy–welfare nexus is crucial for formulating effective energy and economic policies, as these dynamics continuously evolve with changes in economic conditions and policies.

Keywords: Energy–Welfare Nexus; Economic Development; Causality Hypotheses; Circular Dynamics; Sustainability (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035310364
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