Rediscovering the Solow Model: An Energy Network Approach

Carl-Johan Dalgaard and Holger Strulik

No 07-09, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: The present paper provides a new theory of capital accumulation and growth. While the law of motion for capital per worker is structurally identical to that of the neoclassical growth model (Solow, 1956), the underlying foundation is very different. In contrast to the Solow model, the purposed theory is based on thermodynamical principles and associations reflecting the geometrical properties of energy transporting networks. The theory predicts that in the absence of technological progress growth is ultimately limited by the capacity of networks to supply sufficient energy to support continual increases in the per capita stock of capital. We also examine the theory empirically, and find that cross country data supports its key predictions.

Keywords: economic growth; energy; networks (search for similar items in EconPapers)
JEL-codes: I12 J13 O11 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2007-04
New Economics Papers: this item is included in nep-cse and nep-hpe
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:0709

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