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On technical change in the elasticities of resource inputs

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Author Info
Growiec, Jakub
Schumacher, Ingmar

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Abstract

This article analyses growth of an economy where the substitutability between non-renewable and renewable resource inputs changes over time. We allow for exogenous technical change in the elasticity of substitution (EoS) between these two types of resources as well as for biased factor-augmenting technical change. Our main results are: (1) sustained technical change in the EoS is enough to overcome resource constraints; (2) productivity-enhancing technical change is most beneficial when directed to the resource which is currently most important for production; (3) the speed of productivity-enhancing technical change is crucial for its usefulness to overcome resource constraints; (4) sustainability depends critically on the type of technical change.

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Publisher Info
Article provided by Elsevier in its journal Resources Policy.

Volume (Year): 33 (2008)
Issue (Month): 4 (December)
Pages: 210-221
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Handle: RePEc:eee:jrpoli:v:33:y:2008:i:4:p:210-221

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Web page: http://www.elsevier.com/locate/inca/30467

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Related research
Keywords: Elasticity of substitution Technical change Biased technical change Non-renewable resources Renewable resources;

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References listed on IDEAS
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  1. de La Grandville, Olivier, 1989. "In Quest of the Slutsky Diamond," American Economic Review, American Economic Association, vol. 79(3), pages 468-81, June. [Downloadable!] (restricted)
  2. Francisco J. André & Emilio Cerdá, 2004. "On natural resource substitution," Economic Working Papers at Centro de Estudios Andaluces E2004/48, Centro de Estudios Andaluces. [Downloadable!]
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  3. Christian Scholz & Georg Ziemes, 1999. "Exhaustible Resources, Monopolistic Competition, and Endogenous Growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(2), pages 169-185, March. [Downloadable!] (restricted)
  4. Klump, Rainer & Preissler, Harald, 2000. " CES Production Functions and Economic Growth," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(1), pages 41-56, March. [Downloadable!] (restricted)
  5. Christian Groth & Poul Schou, 2002. "Can non-renewable resources alleviate the knife-edge character of endogenous growth?," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 386-411, July.
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  6. Christian Groth, 2003. "Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate," EPRU Working Paper Series 03-20, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics. [Downloadable!]
  7. Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June. [Downloadable!] (restricted)
  8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  9. Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June. [Downloadable!] (restricted)
  10. Bretschger, Lucas, 2005. "Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity?," Ecological Economics, Elsevier, vol. 54(2-3), pages 148-163, August. [Downloadable!] (restricted)
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