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How Dependent is Output Growth from Primary Energy

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  • How is economic growth linked to energy consumption?

    It has generally been seen that growth in economy leads to growth in energy consumption while a shortfall in the energy supply constrains the economic growth.
    Therefore, the availability, accessibility, and affordability of energy resources are critical factors for economic growth.

  • What is the relationship between energy and GDP?

    Gross Domestic Product (GDP) per capita, 2020
    Energy is used along with other inputs to transform natural resources into goods and services.
    It is not surprising therefore that there is a general positive relationship between energy use per capita and GDP per capita.

  • What is the primary energy use?

    Energy use not only includes electricity, but alsoother areas of consumption including transport,heating and cooking.
    Note: Energy refers to primary energy – the energy input before thetransformation to forms of energy for end-use (such as electricity orpetrol for transport).

  • GDP and Energy Use
    The main question that is posed is whether or not it is a higher GDP that promotes higher levels of energy use or vice versa.
    If energy consumption causes an increase in GDP this implies that economies are energy dependent, and thus energy use is required to stimulate growth.
This evolution might mitigate the influence of energy use on growth in the long-run. This possible effect will be captured by the long-run dependency ratio of output with respect to energy efficiency. As a matter of fact, the latter turns out to lie, between 0.6 and 0.7 as well.

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How Dependent is Output Growth from Primary Energy