Verification of Energy's Role as a Determinant of US Economic Activity, 1890-1985

摘要

This paper verifies, through statistical analysis of annual data from 1890 to 1985, the fact that increases in both energy price and energy consumption per unit of national output are uniquely important determinants of following-year aggregate declines in macroeconomic activity. Increases in energy price are treated as economic efficiency losses, while increases in the energy intensity of national output are termed thermodynamic efficiency losses. These losses are shown to be associated weakly with contemporaneous price inflation and with following-year declines in the rate of growth of the money supply. Combined increases in both energy price and consumption per unit output cause an increase in consumer spending on energy that is in excess of the rate of increase of national output (GNP). When a single energy spending increase variable is substituted for separate price and consumption variables, increases in this variable are shown to cause following-year declines in the rate of growth of the money stock for both M1 and the old M2 series. The energy spending variable is shown to explain more of following-year variation in GNP growth than does a change in rate of growth of the M1 or old M2 money stock. When both money and energy variables are tested jointly as predictors of the following-year GNP variable, energy and M1 remain statistically significant and M2 retains its expected sign. A test of money variables as a cause of the energy spending variable does not support the hypothesis that money causes energy. The results indicate that energy is a more important determinant of macroeconomic activity than money, though supporting the theory that money is uniquely important. (ERA citation 11:050858)