Models of Electricity with Capital and Labor

Abstract

As we previously discussed, the production function with electricity is a new form of research of input and output relationship, taking electricity consumption as the representative of production input; production volumes, income, profit, and added value are seen as outputs. On the other hand, labor force and capital inputs are obviously two key production factors in economic activities. We summarize the relationship between labor input, capital input, and electricity consumption. As introduced in formula (2–45) in Chap. 2, Cobb–Douglas production function places labor and capital inputs as the two core variables. In this chapter, we will investigate the relationship between labor input, capital input, and electricity consumption. Based on the E-L model, the minimum requirement of increased future job opportunities can be estimated by the growth of electricity demand. A case study of China’s future scenario is conducted in this chapter, which measures several scenarios of the increasing jobs through China’s future electricity consumption.