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The economic growth enigma revisited: The EU-15 since the 1970s

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  • Voudouris, Vlasios
  • Ayres, Robert
  • Serrenho, Andre Cabrera
  • Kiose, Daniil

Abstract

Current macro-econometric models mostly incorporate just two factors of production, labour and capital (with a time-dependent multiplier representing technological change or total factor productivity). These models assume that energy is an intermediate product of some combination of human labour and capital. These models also assume that the supply of energy is driven by economic demand. We assume the contrary, i.e. that useful energy is a primary input, derived (mostly) from natural capital. This failure to capture the impact of primary resources (as useful energy) on economic growth leads to inappropriate formulation of economic growth theories. To understand that impact better we need explicit evidence of marginal products of capital, labour and useful energy or useful work. As applied to the explanation of the past half century of economic growth of the EU-15 countries, the new results demonstrate the use of non-parametric relationships between capital, labour and useful energy to explain economic growth. They also indicate that marginal products of capital, labour and useful energy are variable – the marginal product depends on the levels of capital stock, labour input and useful energy flows. The proposed semi-parametric production function suggests country-specific policy implications for the EU (and other countries).

Suggested Citation

  • Voudouris, Vlasios & Ayres, Robert & Serrenho, Andre Cabrera & Kiose, Daniil, 2015. "The economic growth enigma revisited: The EU-15 since the 1970s," Energy Policy, Elsevier, vol. 86(C), pages 812-832.
  • Handle: RePEc:eee:enepol:v:86:y:2015:i:c:p:812-832
    DOI: 10.1016/j.enpol.2015.04.027
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Naqvi, Asjad & Stockhammer, Engelbert, 2018. "Directed Technological Change in a Post-Keynesian Ecological Macromodel," Ecological Economics, Elsevier, vol. 154(C), pages 168-188.
    2. Paul E. Brockway & Harry Saunders & Matthew K. Heun & Timothy J. Foxon & Julia K. Steinberger & John R. Barrett & Steve Sorrell, 2017. "Energy Rebound as a Potential Threat to a Low-Carbon Future: Findings from a New Exergy-Based National-Level Rebound Approach," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-24, January.
    3. Carey W. King, 2015. "Comparing World Economic and Net Energy Metrics, Part 3: Macroeconomic Historical and Future Perspectives," Energies, MDPI, Open Access Journal, vol. 8(11), pages 1-24, November.
    4. repec:gam:jeners:v:12:y:2018:i:1:p:110-:d:193947 is not listed on IDEAS
    5. Carey W. King & John P. Maxwell & Alyssa Donovan, 2015. "Comparing World Economic and Net Energy Metrics, Part 2: Total Economy Expenditure Perspective," Energies, MDPI, Open Access Journal, vol. 8(11), pages 1-22, November.
    6. Richters, Oliver & Siemoneit, Andreas, 2017. "Fear of stagnation? A review on growth imperatives," VÖÖ Discussion Papers 6/2017, Vereinigung für Ökologische Ökonomie e.V. (VÖÖ).
    7. repec:eee:appene:v:211:y:2018:i:c:p:1039-1049 is not listed on IDEAS
    8. repec:gam:jeners:v:8:y:2015:i:11:p:12975-12996:d:58938 is not listed on IDEAS
    9. repec:gam:jeners:v:8:y:2015:i:11:p:12997-13020:d:58940 is not listed on IDEAS
    10. Grégoire Wallenborn, 2018. "Rebounds Are Structural Effects of Infrastructures and Markets," ULB Institutional Repository 2013/277828, ULB -- Universite Libre de Bruxelles.
    11. Oliver Richters & Andreas Siemoneit, 2018. "The contested concept of growth imperatives: Technology and the fear of stagnation," Working Papers V-414-18, University of Oldenburg, Department of Economics, revised Nov 2018.

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