Abstract
To describe the performance of a production system, one uses basic terms and notions which were introduced by many researchers during the long period of development of economic theory. In this chapter, the terms needed to describe the phenomenon of social production and economic growth are introduced and discussed. The main chain of definitions is as follows: product–output–investment–stock of production equipment. The latter is a set of the real means of production: the collection of tools and all energy-conversion machines, including information processing equipment, plus ancillary structures to contain and move them. The term capital stock is applied for the value of the stock of production equipment (the means of production). In this and the following chapters, time series of some quantities for the U.S. economy, which are collected in Appendix B, are used for illustration.
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Notes
- 1.
The assessment and comparison of value of the various products existing in various points in time is complicated by the lack of a constant scale of value. As known financier Lietaer [8, p. 254] writes: ‘The world has been living without an international standard of value for decades, a situation which should be considered as inefficient as operating without standard of length or weight.’ The absence of a constant scale of value is a headache, both for experts and for analysts.
- 2.
The System of National Accounts 1993. http://unstats.un.org/unsd/nationalaccount/sna.asp.
- 3.
An interesting description of the history of approaches to the estimation of the GDP for various nations was given by Studenski [9].
- 4.
- 5.
1 cal=4.18 joules.
- 6.
It is customary to speak about the consumption of energy in a national economy. For precision, the word consumption should be replaced by the word conversion. Energy cannot be used up in the production process; it can only be converted into other forms: chemical energy into heat energy, heat energy into mechanical energy, mechanical energy into heat energy and so on. The measure of converted energy (work) is exergy.
- 7.
Primary energy is the name for primary energy carriers (oil, coal, running water, wind and so on) measured in energy units. It is convenient to measure huge amounts of energy in a special unit quad (1 quad=1015 Btu≈1018 J), which is usually used by the U.S. Department of Energy.
- 8.
The problems arising in the estimation of the amount of energy which is converted (used up) in production processes to do useful work are discussed by Patterson [22], Nakićenović et al. [23], Zarnikau et al. [24] and Ayres [25]. According to Nakićenović et al. [23], the global average of primary to final efficiency was about 70% in year 1990, while it was higher in developed countries. Data collected by Ayres [25, Table 2] demonstrates that efficiency of energy conversion increased during the last centuries.
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Pokrovskii, V.N. (2012). Empirical Foundation of Input–Output Model. In: Econodynamics. New Economic Windows. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-2096-1_2
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