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Fickle Fossils. Economic Growth, Coal and the European Oil Invasion 1900-2015

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  • Miriam Fritzsche

    (Humboldt-University Berlin)

  • Nikolaus Wolf

    (Humboldt-University Berlin, CEPR, CESifo)

Abstract

Fossil fuels have shaped the European economy since the industrial revolution. In this paper, we analyse the effect of coal and oil on long-run economic growth, exploiting variation at the level of European NUTS-2 and NUTS-3 regions over the last century. We show that an “oil invasion” in the early 1960s turned regional coal abundance from a blessing into a curse, using new detailed data on carboniferous strata as an instrument. Moreover, we show that human capital accumulation was the key mechanism behind this reversal of fortune. Not only did former coal regions fail to accumulate sufficient levels of human capital, but pre-industrial human capital helped declining regions to reinvent themselves. Without sufficient human capital, fossil fuels did never generate sustainable growth.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Miriam Fritzsche & Nikolaus Wolf, 2022. "Fickle Fossils. Economic Growth, Coal and the European Oil Invasion 1900-2015," Working Papers 029, The Productivity Institute.
    • Handle: RePEc:anj:wpaper:029
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    References listed on IDEAS

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    More about this item

    Keywords

    Coal; Oil invasion; Education; Reinvention; Economic Growth;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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