E-GDP Functions for a National Economy

Abstract

Industrial electricity consumption, the sum of the electricity consumption of the three industries, can reflect a part of the economy’s operation. However, it is a comprehensive part. As was discussed in Chap. 2, with a certain level of production technology, the electricity consumption of enterprise production corresponds to the inputs of all raw materials, labors, and the associated factors required for production. As long as these inputs are transferred into product through production, there will always be a corresponding requirement of electricity consumption. In other words, if these inputs are considered as multiple variables, the enterprise production process will be a process of mapping these variables to electricity consumption. This mapping constitutes the relationship between the other production factors (x, y, …, z) and electricity consumption e, that is, e = f (x, y, …, z). This is known as the relationship between the production inputs and the electricity consumption. For our analysis, it is necessary to enable production and operation to become the function of a single variable. This will be a one-variable function of the relationship of the electricity consumption with the production, sales revenue, profits, value added, and the like. This idea can also be used for sectors, industries, and countries/regions. Therefore, it is both simple and practical to adopt this method for finding the relationship between electricity consumption and the value added. Studying the economy in this simple way allows us to uncover its intrinsic character. Through the E-GDP function, we can excavate and understand these characteristics. We can also analyze their replication and mutation, diagnose economic operations, uncover problems, and provide a timely warning beforehand. We can also conduct in-depth research and suit the remedy to each specific case. In this way, we will be able to realize healthy economic operation.