2018/12/12 by Benjamin Leiva, Benjamín Leiva, Octavio Ramirez +5
Economics, Econometrics and Finance · Energy · Engineering · Environmental Science · Mathematics · Physics and Astronomy · #Advanced Thermodynamics and Statistical Mechanics #Budget constraint #Computer science #Constraint (computer-aided design) #Economics #Energy (signal processing) #Energy budget #Engineering #FOS: Economics and business #Global Energy and Sustainability Research #Mathematical economics #Mathematics #Microeconomics #Neoclassical economics #Perspective (graphical) #Physics #Prime (order theory) #Prime mover #Reinterpretation #Sustainability and Ecological Systems Analysis #Theoretical Economics (econ.TH) #Thermodynamics #econ.TH
paper · pdf · doi:10.48550/arxiv.1812.05091
published in arXiv (Cornell University) (Cornell University) · 15 pages, 2 figures
arxiv created 2018/12/12 · openalex publication_date 2018/12/12 · arxiv updated 2018/12/13 · openalex created_date 2021/02/01 · openalex updated_date 2026/07/28
Growth theory has rarely considered energy despite its invisible hand in all\nphysical systems. We develop a theoretical framework that places energy\ntransfers at centerstage of growth theory based on two principles: (1) goods\nare material rearrangements and (2) such rearrangements are done by energy\ntransferred by prime movers (e.g. workers, engines). We derive the implications\nof these principles for an autarkic agent that maximizes utility subject to an\nenergy budget constraint and maximizes energy surplus to relax such constraint.\nThe solution to these problems shows that growth is driven by positive marginal\nenergy surplus of energy goods (e.g. rice, oil), yet materializes through prime\nmover accumulation. This perspective brings under one framework several results\nfrom previous attempts to insert energy within growth theory, reconciles\neconomics with natural sciences, and provides a basis for a general\nreinterpretation of economics and growth as the interplay between human desires\nand thermodynamic processes.\n