Fueling growth when oil peaks: directed technological change and the limits to efficiency
While fossil energy dependency has declined and energy supply has grown in the postwar world economy, future resource scarcity could cast its shadow on world economic growth soon if energy markets are forward looking. We develop an endogenous growth model that reconciles the current aggregate trends...
| Authors: | , |
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| Format: | article |
| Publication Date: | 2014 |
| Country: | España |
| Institution: | Universidad Complutense de Madrid (UCM) |
| Repository: | Docta Complutense |
| Language: | English |
| OAI Identifier: | oai:docta.ucm.es:20.500.14352/35246 |
| Online Access: | https://hdl.handle.net/20.500.14352/35246 |
| Access Level: | Open access |
| Keyword: | O41 Q32 Q43 Non-renewable resources Energy Economic growth Innovation Directed technical change. Petrología Desarrollo económico Macroeconomía 5307.03 Modelos y Teorías del desarrollo Económico 5307.04 Estudios del desarrollo Económico 5307.14 Teoría Macroeconómica |
| Summary: | While fossil energy dependency has declined and energy supply has grown in the postwar world economy, future resource scarcity could cast its shadow on world economic growth soon if energy markets are forward looking. We develop an endogenous growth model that reconciles the current aggregate trends in energy use and productivity growth with the intertemporal dynamics of forward looking resource markets. Combining scarcity-rent driven energy supply (in the spirit of Hotelling) with profit-driven Directed Technical Change (in the spirit of Romer/Acemoglu), we generate transitional dynamics that can be qualitatively calibrated to current trends. The long-run properties of the model are studied to examine whether current trends are sustainable. We highlight the role of extraction costs in mining. |
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