Why is GDP-to-oil silly? It seems less like GDP-to-land and more like GDP in energy-backed currency. If I wanted to measure the output of an alien civilization, I’d use a measure like that.
I think GDP/(price of energy) is going up, as is total energy output.
ETA: in fact the price of electricity seems to be rising slower than inflation (residential and commercial electricity prices are falling by >0.5%/year here, industrial prices are flat), so your intuitive measure would suggest that CPI-adjusted GDP growth understates rather than overstates real growth.
I agree oil isn’t as bad as GDP-to-land, even if oil supply is perfectly inelastic, because there are better substitutes—if you get richer, you can replace oil with gas or with electric cars and so on. But it’s not too surprising to have a 30 year period where oil is significantly better than the next best alternative, and during that period the substitutes don’t take much pressure off the price and it’s almost as bad a measure as GDP-to-land.
Why is GDP-to-oil silly? It seems less like GDP-to-land and more like GDP in energy-backed currency. If I wanted to measure the output of an alien civilization, I’d use a measure like that.
I think GDP/(price of energy) is going up, as is total energy output.
ETA: in fact the price of electricity seems to be rising slower than inflation (residential and commercial electricity prices are falling by >0.5%/year here, industrial prices are flat), so your intuitive measure would suggest that CPI-adjusted GDP growth understates rather than overstates real growth.
I agree oil isn’t as bad as GDP-to-land, even if oil supply is perfectly inelastic, because there are better substitutes—if you get richer, you can replace oil with gas or with electric cars and so on. But it’s not too surprising to have a 30 year period where oil is significantly better than the next best alternative, and during that period the substitutes don’t take much pressure off the price and it’s almost as bad a measure as GDP-to-land.