tailieunhanh - ACCOUNTING FOR GROWTH: THE ROLE OF PHYSICAL WORK

Ecosystem accounts are being developed as part of the System of Environmental-Economic Accounts which aims at supplementing the UN System of National Accounts with information on the environment and natural capital. The purpose is to broaden the scope of the variables taken into account in policymaking in order to improve understanding of the interdependence and interactions between the economy and the environment. Ultimately, these ecosystem accounts will yield new indicators and aggregates expressed in physical and monetary units that will be made available to policymakers and analysts to assess the efficiency of natural resource use, the pattern of economic growth, the contribution of nature and its use within and outside the market, the short- and. | ACCOUNTING FOR GROWTH THE ROLE OF PHYSICAL WORK Robert U Ayres Benjamin Warr1 Center for the Management of Environmental Resources INSEAD Fontainebleau France Email Abstract This paper tests several related hypothesis for explaining US economic growth since 1900. It begins from the belief that consumption of natural resources - especially energy or more precisely exergy has been and still is an important factor of production and driver of economic growth. However the major result of the paper is that it is not raw energy exergy as an input but exergy converted to useful physical work that - along with capital and human labor - really explains output and drives long-term economic growth. We develop a formal model Resource-EXergy Service or REXS based on these ideas. Using this model we demonstrate first that if raw energy inputs are included with capital and labor in a Cobb-Douglas or any other production function satisfying the Euler constant returns condition the 100-year growth history of the US cannot be explained without introducing an exogenous technical progress multiplier the Solow residual to explain most of the growth. However if we replace raw energy as an input by useful work the sum total of all types of physical work by animals prime movers and heat transfer systems as a factor of production the historical growth path of the US is reproduced with high accuracy from 1900 until the mid 1970s without any residual except during brief periods of economic dislocation and with fairly high accuracy since then. There are indications that an additional factor possibly information technology needs to be taken into account as a fourth input factor since the 1970s. Various hypotheses for explaining the latest period are discussed briefly along with future implications. R. U. Ayres B. Warr Accounting for growth the role of physical work Page 1 1. Introduction The primary motivation of this paper is to revisit the neoclassical theory of growth