ENERGY SCARCITY AND ECONOMIC-GROWTH RECONSIDERED

This analysis is concerned with the effect of energy scarcity on economic growth in the United States. After defining the notion of scarcity and introducing two measures of scarcity, namely unit costs and relative energy price, changes in the trend in resource scarcity are investigated for natural gas, bituminous coal, anthracite coal and crude oil over the most recent three decades. Each of the energy resources became significantly more scarce during the decade of the 1970s in the Malthusian stock scarcity and Malthusian flow scarcity sense. Unit costs exhibit a similar change for natural gas and crude oil bur not for bituminous coal and anthracite coal. The situation reversed itself during the 1980s. Natural gas, bituminous coal, anthracite coal, and crude oil all became significantly less scarce during the 1980s than the 1970s. That is, the increase in scarcity as measured by relative energy prices observed during the 1970s was not reversed completely during the 1980s for natural gas and crude oil. Unit costs for natural gas and crude oil demonstrate analogous patterns and test results. Given that change has taken place, it has implications for future economic growth to the extent that resource scarcity and economic growth are interrelated To see whether this is a relevant concern, subsequent to the examination of changing trends in resource scarcity, an objective effort is made to identify a long-nln equilibrium relationship between energy scarcity and economic growth. Relying on cointegration techniques, only for crude oil is there a suggestion that resource scarcity has affected economic growth in the United States over the period 1889-1992.