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Rediscovering the Solow Model: An Energy Network Approach

Author

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  • Carl-Johan Dalgaard

    (Department of Economics, University of Copenhagen)

  • Holger Strulik

    (University of Hannover)

Abstract

The present paper provides a new theory of capital accumulation and growth. While the law of motion for capital per worker is structurally identical to that of the neoclassical growth model (Solow, 1956), the underlying foundation is very different. In contrast to the Solow model, the purposed theory is based on thermodynamical principles and associations reflecting the geometrical properties of energy transporting networks. The theory predicts that in the absence of technological progress growth is ultimately limited by the capacity of networks to supply sufficient energy to support continual increases in the per capita stock of capital. We also examine the theory empirically, and find that cross country data supports its key predictions.

Suggested Citation

  • Carl-Johan Dalgaard & Holger Strulik, 2007. "Rediscovering the Solow Model: An Energy Network Approach," Discussion Papers 07-09, University of Copenhagen. Department of Economics.
    • Handle: RePEc:kud:kuiedp:0709
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    File URL: http://www.econ.ku.dk/english/research/publications/wp/2007/0709.pdf/
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    References listed on IDEAS

    as
    1. Carl-Johan Dalgaard & Holger Strulik, 2006. "Subsistence – A Bio-economic Foundation of the Malthusian Equilibrium," Discussion Papers 06-17, University of Copenhagen. Department of Economics.
    2. Jesus Felipe & Franklin M. Fisher, 2003. "Aggregation in Production Functions: What Applied Economists should Know," Metroeconomica, Wiley Blackwell, vol. 54(2‐3), pages 208-262, May.
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    Cited by:

    1. Maria Fröling, 2011. "Energy use, population and growth, 1800–1970," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(3), pages 1133-1163, July.
    2. Maciej Malaczewski, 2018. "Natural Resources As An Energy Source In A Simple Economic Growth Model," Bulletin of Economic Research, Wiley Blackwell, vol. 70(4), pages 362-380, October.

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    More about this item

    Keywords

    economic growth; energy; networks;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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