Energy and Economic Growth: The Stylized Facts
49 Pages Posted: 20 Feb 2016
Date Written: November 1, 2014
We summarize what we know about energy and economic growth in a set of stylized facts. We combine analysis of a panel data set of 99 countries from 1971 to 2010 with analysis of some longer run historical data. Our key result is that over the last 40 years there has been a stable cross-sectional relationship between per capita energy use and income per capita with an elasticity of energy use with respect to income of less than unity. This implies that energy intensity has tended to decrease in countries that have become richer but not in others. We also find that over the last two centuries there has been convergence in energy intensity towards the current distribution, per capita energy use has tended to rise, energy quality to increase, and, though evidence is limited, the cost share of energy has declined.
Keywords: Economic development, energy intensity, energy efficiency
JEL Classification: Q43, O44, O13
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