Hall and Klitgaard, among others, speculate that secular stagnation and a failure to grow could cause great disruption. What role does a lower EROEI play in this sad scenario?

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Sydney Horton

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6 May, 22:40

Hall and Klitgaard, among others, speculate that secular stagnation and a failure to grow could cause great disruption. What role does a lower EROEI play in this sad scenario?

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Jaylen Stephenson · Answer 1

Role of lower EROEI:

EROEI is responsible for putting a halt and reversing the economic growth. An economy faces secular stagnation when there is less to zero demand in the market for a prolonged period. The term was first coined by economists of the United States during the Great Depression. It came to their understanding that the nation will undergo a slow growth for a very long time. EROEI is considered as another reason for stagnant and failed growth of an economy.

Since the discovery of EROEI, there has been a significant increase in the consumption of energy. This started a chain of series, that is, decreasing number of fossil fuel reserves which in turn results in low EROEI. A low EROEI results in secular stagnation and failure to grow.