RELATIONSHIP BETWEEN ENERGY AND ECONOMIC GROWTH EXPERIENCE FROM SELECTED ASIAN COUNTRIES

Abstract

Healthy economic growth is regarded as the most basic materials of any newlineeconomy to increase the economic production, reduce the poverty and in general newlineenhance the quality of life. World economy has witnessed huge change in the growth newlineperformance of countries since the onset of industrial revolution. The industrial newlinerevolution in the developed economies of West was made possible only due to the newlineexploitation of fossil fuels which, in turn, was made possible by capital goods newlineinnovations that enabled this source of energy to be used efficiently. Thus the newlinecombination of the modern technology and energy use is found to be the crucial for newlinethe rapid development of economies. The industrialization in the West was newlineaccompanied by an energy transition away from traditional biomass, and towards newlinemodern fuels. The modern developed economies show that the energy consumption newlineand economic growth go hand in hand, as these economies show high energy newlineconsumption as compared to the other less developed economies and these newlineeconomies consume a fairly high proportion of total energy resources of globe. In newlineorder to spur the pace of economic growth, a number of theories have been newlinedeveloped which enriched the growth literature in emphasizing the distinct steps newlinerequired for raising economic growth. The physical and biological theories has been newlinehighly relevant with the role of energy in day to day life, be it for undertaking any newlinephysical work, or the production of food by living organisms. However, the theories in newlineeconomic literature ascribe little role to energy in determining the economic growth of newlineany country. The classical economists declared that land, labour and capital are the newlinemain factors of production and they neglected the important role played by the energy newlinein the production process as well as economic progress. Famous growth theories in newlinethe literature such as the Harrod-Domar growth model; and the subsequent, wellknown newlinetheory commonly referred to as the Solow-Swan growth model, among others, newlineclaim that energy has nothing to do with