Has anyone considered that recessions are just lotka volterra cycles due to fuel resource depletion? Or has this been completely ignored by all economists for hundreds of years?

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    $\begingroup$ Seeing that the Lotka-Volterra model is not yet a hundred years old and the combustion engine is a little over a hundred years old I would not be surprised if all economists before 1900 ignored this. But it is an interesting idea, do publish! $\endgroup$ – Giskard Jun 23 '16 at 6:21
  • $\begingroup$ The lv curve has existed in some form forever cassandralegacy.blogspot.com/2011/08/… $\endgroup$ – D J Sims Jun 23 '16 at 13:20
  • $\begingroup$ But that is not what your highly specific question is about, is it...? $\endgroup$ – Giskard Jun 23 '16 at 21:17

I don't know that anyone's used a Lotka Volterra framework: it's not an obvious choice, but it might make for a novel(ty) article. Nevertheless, yes, it's a well-established observation that historically, surges in oil prices have been part of triggering global economic downturns.

But that's just oil prices. So it's only during the oil age, which is now ending.

Historically, for the last couple of centuries, most of our energy has been implicitly and explicitly subsidised: implicitly by the huge externalities of fossil fuel combustion. The direct consequence of that is that fuel expenditure play an inefficiently large role in the global economy. And that means that rapid changes in global fuel prices have had a very destabilising effect on the global economy.

But there are two major changes coming:

  1. It's not hard to see the transition to clean energy being one in which energy's role in the global economy diminishes, as externalities get priced in, and as energy efficiency consequently becomes much more cost-competitive.

  2. Furthermore, a very large proportion of clean energy (hydro, wind, PV) has very low operating costs; whereas dirty energy has much much higher operating costs.

So for those two reasons, when we move from dirty energy to clean energy, the global economy will become much less coupled to changes in short-run marginal costs of energy.

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    $\begingroup$ Very interesting - you got any good writes or references that talk about this more in depth? $\endgroup$ – Thorst Jun 23 '16 at 10:22
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    $\begingroup$ @Lasse well, there's this little book that me and a few colleagues put together, but I'll try to find some online articles to link to later, too. $\endgroup$ – 410 gone Jun 23 '16 at 11:08
  • $\begingroup$ Clean energy is nonsense i.imgur.com/0uoDUdV.jpg $\endgroup$ – D J Sims Jun 23 '16 at 13:18
  • $\begingroup$ @EnergyNumbers - thanks, will have a look at it ! $\endgroup$ – Thorst Jun 24 '16 at 5:58
  • $\begingroup$ Renewables are far more intermittent than oil so your argument is based on the exact opposite of reality. $\endgroup$ – D J Sims Aug 11 '16 at 17:29

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