The financial return on energy invested

A number of recent posts on The Oil Drum have explored the relationship between energy and the economy. Francois Cellier provided an overview of links between energy consumption and GDP on a per capita basis. This post will expand on the work of Francois taking a somewhat different approach. In a guest post, Ian Schindler provided an overview of the Ayres-Warr model of economic production which I found easier to read and understand than the original Ayres-Warr paper. Ian made some valuable points about the role of energy efficiency in promoting higher energy prices and higher energy production. David Murphy looked at the relationship between oil prices and rates of oil price change in relation to US GDP and growth whilst drawing attention to the view that the current recession was in part caused by high oil prices.

In this post I want to explore further links between energy consumption, GDP and energy prices.

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