The role of material/energy resources and dematerialization in economic growth theories

Abstract

The nature of energy and material resources in an endogenous growth theory framework is clarified. This involves three modifications of the conventional theory. Firstly, multiple feedback mechanisms or “growth engines ” are identified. Secondly, a production function distinguishes between resource use, technical efficiency and value creation. Thirdly, the impact of the cost of production through demand on growth is accounted for. A formal model is analytically solved under a condition of a constant growth rate. Given model complexity, numerical experiments are performed as well, providing relevant insights to the academic and political debates on ‘environmental Kuznets curves’ and ‘dematerialization’