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
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: O11 I12 J13 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:0709
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