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Energy Distribution, Power Laws, and Economic Growth

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  • Dalgaard, Carl-Johan
  • Strulik, Holger

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.

Suggested Citation

  • Dalgaard, Carl-Johan & Strulik, Holger, 2008. "Energy Distribution, Power Laws, and Economic Growth," Hannover Economic Papers (HEP) dp-385, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  • Handle: RePEc:han:dpaper:dp-385
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    File URL: http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-385.pdf
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    References listed on IDEAS

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    1. Nadiri, M Ishaq & Prucha, Ingmar R, 1996. "Estimation of the Depreciation Rate of Physical and R&D Capital in the U.S. Total Manufacturing Sector," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 43-56, January.
    2. Kühnert, Christian & Helbing, Dirk & West, Geoffrey B., 2006. "Scaling laws in urban supply networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(1), pages 96-103.
    3. 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.
    4. Brock, W A, 1999. "Scaling in Economics: A Reader's Guide," Industrial and Corporate Change, Oxford University Press, vol. 8(3), pages 409-446, September.
    5. 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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    Keywords

    Economic Growth; Energy; Metabolism; Power Laws; Networks;

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