On the correlation between gdp and energy consumption in macroeconomic development

Danilo Yu. Cherevatskyi, Roman G. Smirnov

Abstract


There is substantial literature devoted to the study of the dependence between energy production and economic development. At the same time, the long-standing discussion of the relationship between the gross domestic product and consumption of primary energy resources, numbering thousands of publications, eventually degenerated into a dispute about econometric methods but did not give final results, which caused the need to resort to other approaches. This paper is an attempt to find a solution to this problem by the methods of theoretical mechanics and regression analysis of the relationship between GDP and energy production in macroeconomic development. Our case studies include the economies of Germany, France, Italy, Japan, Russia, Turkey, and Ukraine. In each case, we characterize the gross domestic product, recalculated at purchasing power parity in 2017 prices, and the consumption of primary energy resources (coal, oil, natural gas, hydro and nuclear energy, energy from renewable sources). Within the framework of the study, it was assumed that the development of any national economy over time is its path in the economic space, and the consumption of primary energy resources is due to dynamic characteristics inherent in macroeconomics, in particular, "mass", which serves as a measure of the inertia of the country's economic complex, the presence of an informal sector, etc. The path, traversed by macroeconomics in the economic space, is the gross domestic product accumulated over time. The observation period is from 1990 to 2019, that is – 30 years. The use of the theory of classical mechanics, in particular – kinematics and dynamics, is justified by the fact that macroeconomics in its development requires the expenditure of energy resources, and this likens it to a machine that moves in a certain space that models a given economyсs. The article introduces methodological approaches to defining the conventional mass of macroeconomics, accelerating its movement, expenditure of energy resources for the functioning of the formal sector of the national economy, the efficiency of energy use in the formal sector.

Keywords


macroeconomics, national economy, gross domestic product, primary energy resources, theoretical mechanics, mathematical statistics

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References


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DOI: https://doi.org/10.15407/econindustry2021.02.059

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