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Fuel for economic growth?

descriptionPublicationkeyboard_double_arrow_right Article , Other literature type , Research , Preprint 01 Jan 2015Publisher:Elsevier BVJournal:Journal of Economic Theory, volume 184, page 104,941 (issn: 0022-0531,

Authors: Gars, Johan; Olovsson, Conny;

doi: 10.1016/j.jet.2019.104941 , 10.2139/ssrn.2635376

handle: 10419/129716

Fuel for economic growth?

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Abstract

We set up an endogenous growth model in which the efficiency of both capital and fossil energy can be improved, whereas the efficiency of one alternative energy source is limited. With capital and energy as complements, there exist two steady states: one stagnant where energy is fully derived from the alternative energy source, and one with balanced growth where energy is fully sourced from fossil fuel. Heterogeneity in initial TFP levels can generate the Great Divergence. The demand for fossil fuel in technologically advanced countries drives up its price and makes fossil fuel too costly in less advanced countries that choose the alternative and stagnant energy input.

Related Organizations

Royal Swedish Academy of Sciences
Sweden
Swedish National Bank
Sweden

Keywords

O11, O33, Great Divergence, ddc:330, O50, Industrial Revolution, O41, Malthusian stagnation, Growth, Growth; Malthusian stagnation; Industrial Revolution; Great Divergence; Technological progress, O14, Technological progress, jel: jel:O41, jel: jel:O50, jel: jel:O11, jel: jel:O33, jel: jel:O14

Impact byBIP!

	citations This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).	16
	popularity This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.	Top 10%
	influence This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).	Average
	impulse This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.	Average