# An energy-based macroeconomic model validated by global historical series since 1820

**Authors:** Herve Bercegol, Henri Benisty  
**arXiv:** [2008.10967](https://arxiv.org/abs/2008.10967)  
**Date:** 2020-08-25  
**Summary page:** https://www.summarizepaper.com/en/paper/2008.10967v3/

## Key points

- A new macroeconomic model suggests physical power is fueling economic power.
- From 1820 to 1920, there was linearity between global primary energy consumption (PEC) and world GDP.
- In a consistent model, both physical capital and human capital are fed by PEC and represent a form of stored energy.
- From 1920 to 2016, GDP grows quicker than PEC with periods of quasi-linearity separated by distinct jumps interpreted as radical technology shifts.
- The GDP to PEC ratio accumulates game-changing innovation at an average growth rate proportional to PEC.
- Physical power is essential in driving economic growth across different periods in history.
- Stored energy in physical capital and human capital contributes to economic development.
- Results could inform policymakers on alternative strategies for managing the climate crisis while promoting sustainable economic growth through efficient use of primary energy consumption.

## Summary

The global historical series for primary energy consumption (PEC) and Gross Domestic Product (GDP) spanning the last two centuries has recently become available. In this study, authors Herve Bercegol and Henri Benisty propose a new macroeconomic model that suggests physical power is fueling economic power. The data analysis reveals that from 1820 to 1920, there was linearity between global PEC and world GDP, which justifies basic equations where PEC incorporates unskilled human labor that consumes and converts energy from food. In a consistent model, both physical capital and human capital are fed by PEC and represent a form of stored energy. In the following century, from 1920 to 2016, GDP grows quicker than PEC. Periods of quasi-linearity of the two variables are separated by distinct jumps, which can be interpreted as radical technology shifts. The GDP to PEC ratio accumulates game-changing innovation at an average growth rate proportional to PEC. These results seed alternative strategies for modeling and political management of the climate crisis and the energy transition. The authors' findings suggest that physical power is essential in driving economic growth across different periods in history. Additionally, their proposed macroeconomic model provides insights into how stored energy in physical capital and human capital contributes to economic development. This study's results could inform policymakers on alternative strategies for managing the climate crisis while promoting sustainable economic growth through efficient use of primary energy consumption.