tag:blogger.com,1999:blog-7641626425728151830.post4942197546710774300..comments2024-02-22T15:02:59.414+11:00Comments on Stochastic Trend: Is There Really Granger Causality between Energy Use and Output?David Sternhttp://www.blogger.com/profile/16744705511660270649noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7641626425728151830.post-88251054663823843312016-09-18T04:31:11.623+10:002016-09-18T04:31:11.623+10:00I should clarify my earlier comment. My search wa...I should clarify my earlier comment. My search was actually kicked off by an handbook entry by Paolo Malanima that referenced a graph correlating energy consumption and GDP growth in Kander, Malanima, and Warde's book. Kander herself actually seems much more in the energy-as-production-function-input tradition (as in her article with you) than in the time series comparison tradition.<br /><br />The Malanima "Energy in History" contains an interesting equation, Y/P = (E/P)*(Y/E) (where "E" might as well be the number of students taking an econometrics class at ANU!). He defines rate of growth E/P as e-dot and of Y/E as pi-dot, and then states that the growth of Y/P = e-dot plus pi-dot. he then shows a diagram correlating Y/P and E/P time series and says (in the working paper) "The difference between the interpolating exponential curves was filled through the rise in the efficiency of energy use". That last comment gets dropped, thank goodness, from the published article - but it seems to me that the whole scheme, even allowing for some extreme algebraic simplification, is nonsense.<br /><br />I like the "role of energy" article a lot. I'm still digesting the details but the approach (if one accepts the thought that a single production function can describe pre-modern and modern economies) makes sense to me. I'm skeptical about the part in brackets - the differences between historically pre-industrial and industrial economies may not be the same as the differences between poor and rich nations today - but I'm more than willing to see where this goes.<br /><br />Great blog, TBTom Barsonhttps://www.blogger.com/profile/14632812362415822146noreply@blogger.comtag:blogger.com,1999:blog-7641626425728151830.post-27654209929148361112016-09-18T01:05:06.144+10:002016-09-18T01:05:06.144+10:00I don't think the question you explore here is...I don't think the question you explore here is "silly" at all. There is a reason that mainstream growth theory primarily relies on functional form models, even though it might seem you could just "go to the data" and use time series comparisons and regressions; there are just so many ways to get spurious correlations with the latter approach.<br /><br />Your paper was just what I was looking for. Economic historians (such as Kander and Malanima's Princeton-published "Power to the People") have been resorting to time series regressions in ways that I found pretty puzzling. When I tried to understand this usage I stumbled upon the multitudinous "Energy Consumption and Economic Growth" cointegration articles you refer to. So I was glad to find the overview offered in some of your papers. You have saved a layman some serious thrashing around in matters that are way over his head!Tom Barsonhttps://www.blogger.com/profile/14632812362415822146noreply@blogger.com