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Energy Distribution, Power Laws, and Economic Growth

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Author Info
Dalgaard, Carl-Johan
Strulik, Holger

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Abstract

The natural sciences have established a general scaling law that relates metabolism and body size of animals. Recently this association - known as Kleiber's law - has received deep theoretical foundation by network theory and has been fruitfully applied to explain various biological phenomena, in particular ontogenetic growth. Here we derive a similar power law for economic metabolism (energy consumption per capita) and economic size (capital per capita). Invoking the power law we provide a metabolic-energetic founded law of motion for capital per capita. Using data for the U.S. states we test the resulting structural model and find evidence in favor of a scaling parameter, between energy and capital per capita, of about 2/3.

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Publisher Info
Paper provided by Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover with number dp-385.

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Length: 13 pages
Date of creation: Jan 2008
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Handle: RePEc:han:dpaper:dp-385

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Related research
Keywords: Economic Growth; Energy; Metabolism; Power Laws; Networks;

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  1. Geoffrey B. West & James H. Brown & Brian J. Enquist, 1997. "A General Model for the Origin of Allometric Scaling Laws in Biology," Working Papers 97-03-019, Santa Fe Institute.
  2. Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 409-46, September.
  3. Geoffrey B. West & James H. Brown & Brian J. Enquist, 1999. "The Fourth Dimension of Life: Fractal Geometry and Allometric Scaling of Organisms," Working Papers 99-07-047, Santa Fe Institute.
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