Energy, knowledge, and demo-economic development in the long run: a unified growth model

Victor Court (1, 2) , Emmanuel Bovari (3, 2)

1 CERES-ERTI - Centre d'Enseignement et de Recherche sur l'Environnement et la Societé / Environmental Research and Teaching Institute
2 Chaire Energie & Prospérité
3 CES - Centre d'économie de la Sorbonne

This article provides a knowledge-based and energy-centered unified growth model of the economic transition from limited to sustained growth. In an overlapping generation framework, we introduce final energy as a production factor of a composite final good sector, along with human capital, a learning-by-doing technology, and a Schumpeterian technology. Final energy results from a CES aggregation of energy inputs that come from renewable (biomass, wind, water) and exhaustible (coal, oil, gas) primary resources. The production of those inputs also requires human capital along with specific learning-by-doing and Schumpeterian technologies. Furthermore, with an endogenous sequence of General Purpose Technologies (GPTs), we explicitly feature pure technological externalities that foster the efficiency of both learning-by-doing and R&D-based technological progress. This setting allows us to distinguish two economic regimes: (i) a pre-modern organic regime dominated by limited growth in per capita output, high fertility, low levels of human capital, technological progress generated by learning-by-doing, and rare GPT arrivals; and (ii) a modern fossil regime characterized by sustained growth of per capita output, low fertility, high levels of human capital, technological progress generated by profit-motivated R&D, and increasingly frequent GPT arrivals. Most importantly, these economic, technological and demographic regimes' changes are associated with an energy transition. This transition results from the endogenous shortage of renewable resources availability and the arrival of new GPTs, which redirect technological progress towards the exploitation of previously unprofitable exhaustible energy carriers. Calibrations of the model are currently in progress and will allow a simulation of the historical experience of England for the period 1560-2010. In a second step, we plan to reiterate these simulations to compare the different trajectories of Western Europe and Eastern Asia.

Mots clés: Unified Growth Theory; Useful Knowledge; Energy Transition; Demography

Domaines: Economies et finances

Victor Court, Emmanuel Bovari. Energy, knowledge, and demo-economic development in the long run: a unified growth model . 2018. ⟨hal-01698755v1⟩