Economy of Ukraine
Published since September 1958
Login

№ 12/2021

Ekon Ukr. 2021 (12): 57–70
https://doi.org/10.15407/economyukr.2021.12.057

METHODS OF ECONOMIC-MATHEMATICAL MODELING

УДК 330.55:620.9:330.36

JEL: C40

CHEREVATSKYI Danylo1, SMIRNOV Roman2

1Institute of Industrial Economics of the NAS of Ukraine, Research ID : http://www.researcherid.com/rid/http://www.researcherid.com/rid/C-3166-2018
OrcID ID : https://orcid.org/https://orcid.org/0000-0003-4038-6393
2Dalhousie University, Research ID : http://www.researcherid.com/rid/
OrcID ID : https://orcid.org/https://orcid.org/0000-0001-5971-8541


A NOVEL APPROACH TO CHARACTERIZING THE RELATIONSHIP BETWEEN ECONOMIC GROWTH AND ENERGY CONSUMPTION


At the macroeconomic level, the consumption of primary energy resources is a deterministic factor of economic development, which justifies the relevance and importance of introducing an appropriate mathematical model.
Using the tools of data-driven dynamical systems and Hamiltonian mechanics, we determine the relationship between energy costs and the distance traveled by a particular national economy in the economic space.
The basis for the calculations is the time series describing the evolution of a cumulative GDP, recalculated according to the original method from monetary units to linear geometric dimensions, and energy resources consumed over a fixed period of time.
The relevance of the mathematic relationships so obtained is verified by comparing the model predictions with the empirical data produced by four national economies, namely those of Canada, Poland, Russia, and Ukraine. In all of the four cases the model demonstrated a nearly perfect fit to the actual data.
The approach via approximation the evolutions of economic performance and energy consumption by parabolas proposed in the article lies the groundwork for developing a general theory that may be employed to analyze economic performance of a wide spectrum of national economies and world regions.


Keywords:macroeconomics, primary energy consumption, economic growth, GDP, data-driven dynamical systems, Hamiltonian mechanics.

Article original in English (pp. 57 - 70) DownloadDownloads :9
The article was received by the Editorial staff on August 6 , 2021

References

1. Asafu-Adjaye J. The relationship between energy consumption, energy prices and economic growth: time series evidence from Asian developing countries. Energy Economics, 2000, Vol. 22, No. 6, pp. 615-625.
doi.org/10.1016/S0140-9883(00)00050-5

2. Lee Ch.-Ch. Energy consumption and GDP in developing countries: A cointegrated panel analysis. Energy Economics, 2005, Vol. 27, No. 3, pp. 415-427.
doi.org/10.1016/j.eneco.2005.03.003

3. Ozturk I.A. A literature survey on Energy-growth nexus. Energy Policy, 2010, Vol. 38, No. 1, pp. 340-349.
doi.org/10.1016/j.enpol.2009.09.024

4. Belke A., Dobnik F., Dreger C. Energy consumption and economic growth: New insights into the co-integration relationship. Energy Economics, 2011, Vol. 33, No. 5, pp. 782-789.
doi.org/10.1016/j.eneco.2011.02.005

5. Suganthi L., Samuel A.A. Energy models for demand forecasting -- A review. Renewable and sustainable Energy Reviews, 2012, Vol. 16, No. 2, pp. 1223-1240.
doi.org/10.1016/j.rser.2011.08.014

6. Pirlogea C., Cicea C. Econometric perspective of the energy consumption and economic growth relation in European Union. Renewable and sustainable Energy Reviews, 2012, Vol. 16, No. 8, pp. 5718-5726.
doi.org/10.1016/j.rser.2012.06.010

7. Cherevatskyi D., Chekina V. On correlations between energy consumption and economic growth: analytical review. Economy of Industry, 2015, No. 3(71), pp. 21-30 [in Russian].
doi.org/10.15407/econindustry2015.03.021

8. Chentanavat J., Hunt L.C., Pierce R. Does energy consumption cause economic grows? Evidence from a systematic study of over more 100 countries. Journal of Policy Modeling, 2008, No. 30, pp. 209-220.
doi.org/10.1016/j.jpolmod.2006.10.003

9. Helbing T., Kan D.Sh., Kumhor M. et al. Oil shortage, growing global imbalance. Prospects for the development of the world economy. Washington, International Monetary Fund, 2011, pp. 95-133.

10. Grigor'ev L.M., Kudrin A.A. Economic growth and energy demand. Higher School of Economics. Economic Journal, 2013, No. 3, pp. 390-406 [in Russian].

11. Stern D.I. Energy-GDP relationship. In: The New Palgrave Dictionary of Economics (P. Macmillan (Ed.)), 2015.
doi.org/10.1057/978-1-349-95121-5_3015-1

12. Liu W.C. The Relationship between primary energy consumption and real gross domestic product: Evidence from major Asian countries. Sustainability, 2020, Vol. 12, No. 6.
doi.org/10.3390/su12062568

13. Deichmann U., Reuter A., Vollmer S., Zhang F. Relationship between energy intensity and economic growth: new evidence from a multi-country multi-sector data set. World Bank Policy Research Working Paper, 2018, No. 8322, available at: ssrn.com/abstract=3113873
doi.org/10.1596/1813-9450-8322

14. Beaudreu B.C. The economies of speed, KE = 1/2mv2 and the productivity slowdown. Energy, 2017, No. 124, pp. 100-113.
doi.org/10.1016/j.energy.2017.02.022

15. Smirnov R.G., Wang K. In search of a new economic model determined by logistic growth. E. Journal Appl. Math, 2020, No. 31(2), pp. 339-368.
doi.org/10.1017/S0956792519000081

16. Hirsch M.W. The dynamical systems approach to differential equations. Bull. Amer. Math. Soc. (N.S.), 1984, No. 11 (1), pp. 1-64.
doi.org/10.1090/S0273-0979-1984-15236-4

17. Woodall P. The Big Mac Index. The Economist, 1986, September 6.

18. Boothby W. An Introduction to Differential Manifolds and Riemannian Geometry. New York, Academic Press, 1975.

19. Weatherall J.O. The Physics of Wall Street. Mariner Books Houghton Mifflin Harcourt. Boston, 2013.

20. Cohen A. An Introduction to the Lie Theory of One-Parameter Groups, DC Health & Company, 1911.

-->