Most attempts to marry economics and physics run aground on complexities. But Timothy Garrett, an associate professor of atmospheric sciences at the University of Utah, has created a physics-based model of the world economy that can forecast long-term economic growth.
In a recent paper for the Boston-based Retirement Income Industry Association, Garrett calculated that during the past 40 years the ratio of global wealth to energy consumption has remained fixed. The climate scientist isn’t the first person to link energy and economic expansion. By framing civilization as a physical system where wealth is the accumulation of past production and gross domestic product is the return on that wealth, though, Garrett argues that the economy must obey the laws of physics. Also, his model stands up to scientific scrutiny because it can be tested, he says.
Garrett describes energy reserves as civilization’s retirement account. “If we have a positive rate of return in the future, it is going to be dependent on this balance between discovery of new reserves and our current depletion of existing resources,” he explains. Garrett notes that his long-term forecasting only works if one considers the global economy as a whole. “I would not dream of doing so for Europe or the U.S.,” he says. “That sounds like too hard a problem.” His call: Over the next decade world GDP and wealth should climb at an inflation-adjusted 2.2 percent annually.