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Energy and the State of Nations

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  • Lindenberger, Dietmar

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Kuemmel, Rainer

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

Abstract

The mathematical conditions for the existence of macroeconomic production functions that are state functions of the economic system are pointed out. The output elasticities and the elasticities of substitution of energy-dependent Cobb-Douglas, CES and LinEx production functions are calculated. The output elasticities, which measure the productive powers of production factors and whose numerical values have been obtained for Germany, Japan, and the USA, are for energy much larger and for labor much smaller than the cost shares of these factors. Energy and its conversion into physical work accounts for most of the growth that mainstream economics attributes to “technological progress” and related concepts. It decisively determines the economic state of nations. Consequences for automation and globalization and perspectives on growth are discussed.

Suggested Citation

  • Lindenberger, Dietmar & Kuemmel, Rainer, 2011. "Energy and the State of Nations," EWI Working Papers 2011-11, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    • Handle: RePEc:ris:ewikln:2011_011
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    References listed on IDEAS

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    4. Bibas, Ruben & Méjean, Aurélie & Hamdi-Cherif, Meriem, 2015. "Energy efficiency policies and the timing of action: An assessment of climate mitigation costs," Technological Forecasting and Social Change, Elsevier, vol. 90(PA), pages 137-152.
    5. Santos, João & Domingos, Tiago & Sousa, Tânia & St. Aubyn, Miguel, 2018. "Useful Exergy Is Key in Obtaining Plausible Aggregate Production Functions and Recognizing the Role of Energy in Economic Growth: Portugal 1960–2009," Ecological Economics, Elsevier, vol. 148(C), pages 103-120.
    6. Kümmel, Reiner & Lindenberger, Dietmar & Weiser, Florian, 2015. "The economic power of energy and the need to integrate it with energy policy," Energy Policy, Elsevier, vol. 86(C), pages 833-843.
    7. Leiva, Benjamin & Ramirez, Octavio A. & Schramski, John R., 2019. "A framework to consider energy transfers within growth theory," Energy, Elsevier, vol. 178(C), pages 624-630.
    8. Ayres, Robert U. & van den Bergh, Jeroen C.J.M. & Lindenberger, Dietmar & Warr, Benjamin, 2013. "The underestimated contribution of energy to economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 79-88.
    9. Paoli, Leonardo & Cullen, Jonathan, 2020. "Technical limits for energy conversion efficiency," Energy, Elsevier, vol. 192(C).
    10. Wan-Jiun Chen & Chien-Ho Wang, 2020. "A General Cross-Country Panel Analysis for the Effects of Capitals and Energy, on Economic Growth and Carbon Dioxide Emissions," Sustainability, MDPI, vol. 12(15), pages 1-20, July.
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    12. Martin de Wit & Matthew Kuperus Heun & Douglas J Crookes, 2013. "An overview of salient factors, relationships and values to support integrated energy-economic systems dynamic modelling," Working Papers 02/2013, Stellenbosch University, Department of Economics.
    13. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    14. Hutzler, S. & Sommer, C. & Richmond, P., 2016. "On the relationship between income, fertility rates and the state of democracy in society," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 452(C), pages 9-18.
    15. Germain, Marc, 2019. "Georgescu-Roegen versus Solow/Stiglitz: Back to a controversy," Ecological Economics, Elsevier, vol. 160(C), pages 168-182.
    16. Benjamin Leiva, 2019. "Why Are Prices Proportional to Embodied Energies?," Biophysical Economics and Resource Quality, Springer, vol. 4(3), pages 1-16, September.
    17. Santos, João & Borges, Afonso & Domingos, Tiago, 2020. "Exploring the links between total factor productivity, final-to-useful exergy efficiency, and economic growth: Case study Portugal 1960-2014," MPRA Paper 100214, University Library of Munich, Germany.
    18. João Santos & Miguel Viana & Jaime Nieto & Paul E. Brockway & Marco Sakai & Tiago Domingos, 2024. "The Impact of Energy Efficiency on Economic Growth: Application of the MARCO Model to the Portuguese Economy 1960–2014," Energies, MDPI, vol. 17(11), pages 1-22, June.
    19. Jaime Nieto & Pedro B. Moyano & Diego Moyano & Luis Javier Miguel, 2023. "Is energy intensity a driver of structural change? Empirical evidence from the global economy," Journal of Industrial Ecology, Yale University, vol. 27(1), pages 283-296, February.
    20. Oscar Gonzalo Manrique-Díaz & Diego Fernando Lemus-Polanía, 2020. "Nonlinear optimization method for quantifying the contribution of electricity in the Colombian economic growth, 1925-1997," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 93, pages 65-100, Julio-Dic.
    21. Duro Moreno, Juan Antonio & Giménez-Gómez, José Manuel & Sánchez-Soriano, Joaquín & Vilella Bach, Misericòrdia, 2022. "Allocating remaining carbon budgets and mitigation costs," Working Papers 2072/535074, Universitat Rovira i Virgili, Department of Economics.
    22. Lund, Henrik & Hvelplund, Frede, 2012. "The economic crisis and sustainable development: The design of job creation strategies by use of concrete institutional economics," Energy, Elsevier, vol. 43(1), pages 192-200.
    23. Lindenberger, Dietmar & Kümmel, Reiner, 2013. "The Sledge on the Slope or: Energy in the Economy, and the Paradox of Theory and Policy," EWI Working Papers 2013-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).

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    More about this item

    Keywords

    energy; economic growth; macroeconomic production functions; output elasticities;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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