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Overcoming the natural resource constraint through dedicated R&D effort with heterogenous labor supply

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Author Info
Jean-Pierre Amigues () (Université de Toulouse 1 and INRA (IDEI and LERNA))
Michel Moreaux () (Université de Toulouse 1 (IUF, IDEI and LERNA))
Francesco Ricci () (Université de Cergy-Pontoise (THEMA) and LERNA)

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Abstract

The effective labor possibility frontier (ELPF) is defined as the set of statically efficient allocations of labor imputs in the competing tasks of production and R&D. It summaries the labor scarcity constraint. We show that the dynamically efficient paths of R&D, resource extraction and consumption depend on the shape of the ELPF, while their steady state levels do not. In the case of an initial low endowment of resources, the transition to the stationary state is characterized by lower R&D effort, slower growth of per-capita consumption and a longer transition when labor is relatively specialized than when it is more flexible. We analyse policy options for modifying the shape of the ELPF, such as increasing the size of the labor force, subsiding higher education or lifelong learning.

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Paper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2006-16.

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Date of creation: 2006
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Handle: RePEc:ema:worpap:2006-16

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Related research
Keywords: Exhaustible resources and R&D; Labor allocation; Education policy;

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Find related papers by JEL classification:
Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
I20 - Health, Education, and Welfare - - Education - - - General
J00 - Labor and Demographic Economics - - General - - - General

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References listed on IDEAS
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  1. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-74, December. [Downloadable!] (restricted)
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  2. Brunner, Martin & Strulik, Holger, 2002. "Solution of perfect foresight saddlepoint problems: a simple method and applications," Journal of Economic Dynamics and Control, Elsevier, vol. 26(5), pages 737-753, May. [Downloadable!] (restricted)
    Other versions:
  3. Grimaud, Andre & Rouge, Luc, 2003. "Non-renewable resources and growth with vertical innovations: optimum, equilibrium and economic policies," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 433-453, March. [Downloadable!] (restricted)
  4. Jean-Pierre Amigues & Ngo Van Long & Michel Moreaux, 2004. "Overcoming Natural Resource Constraints Through R&D," CIRANO Working Papers 2004s-14, CIRANO. [Downloadable!]
  5. Kamien, Morton I & Schwartz, Nancy L, 1978. "Optimal Exhaustible Resource Depletion with Endogenous Technical Change," Review of Economic Studies, Blackwell Publishing, vol. 45(1), pages 179-96, February. [Downloadable!] (restricted)
  6. 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)
  7. Smulders, Sjak & de Nooij, Michiel, 2003. "The impact of energy conservation on technology and economic growth," Resource and Energy Economics, Elsevier, vol. 25(1), pages 59-79, February. [Downloadable!] (restricted)
  8. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  9. Jean-Pierre Amigues & Ngo Van Long & Michel Moreaux, 2004. "Overcoming the natural resource constraints through dedicated R&D efforts: contrasting the non-renewable and the renewable resource economies," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 4(1), pages 11-37, January. [Downloadable!] (restricted)
  10. Davison, R, 1978. "Optimal Depletion of an Exhaustible Resource with Research and Development towards an Alternative Technology," Review of Economic Studies, Blackwell Publishing, vol. 45(2), pages 355-67, June. [Downloadable!] (restricted)
  11. Paul M. Romer, 2000. "Should the Government Subsidize Supply or Demand in the Market for Scientists and Engineers?," NBER Working Papers 7723, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  12. 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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