Written by John Lounsbury
Economic theory has failed to incorporate the role of energy in production for two centuries since the Physiocrats, according to Prof. Steve Keen. In this video he derives a production function that includes energy in an essential manner. It implies that economic growth has been driven by the increase in the energy throughput capabilities of machinery.
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Prof. Keen argues that all economic gain can be traced to the use of energy which we receive at no cost from the sun. Capital and labor only participate in the economy only by use of this energy.
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Source: YouTube
