With Exhaustible Resources, Can A Developing Country Escape From The Poverty Trap?
AbstractThis paper studies the optimal growth of a developing non-renewable natural resource producer. It extracts the resource from its soil, and produces a single consumption good with man-made capital. More- over, it can sell the extracted resource abroad and use the revenues to buy an imported good, which is a perfect substitute of the domes- tic consumption good. The domestic technology is convex-concave, so that the economy may be locked into a poverty trap. We show that the extent to which the country will escape from the poverty trap depends, besides the interactions between its technology and its impatience, on the characteristics of the resource revenue function, on the level of its initial stock of capital, and on the abundance of the natural resource.
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Bibliographic InfoPaper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00470655.
Date of creation: Nov 2010
Date of revision:
Publication status: Published, Journal of Economic Theory, 2010, 145, 6, 2435-2447
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optimal growth; non-renewable resource; convex-concave technology; poverty trap; resource curse;
Other versions of this item:
- Le Van, Cuong & Schubert, Katheline & Nguyen, Tu Anh, 2010. "With exhaustible resources, can a developing country escape from the poverty trap?," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2435-2447, November.
- Cuong Le Van & Katheline Schubert & Tu Anh Nguyen, 2007. "With Exhaustible Resources, Can A Developing Country Escape From The Poverty Trap?," Working Papers 15, Development and Policies Research Center (DEPOCEN), Vietnam.
- Cuong Le Van & Katheline Schubert & Tu Anh Nguyen, 2007. "With exhaustible resources, can a developing country escape from the poverty trap ?," Documents de travail du Centre d'Economie de la Sorbonne v07075, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Cuong Le Van & Katheline Schubert & Tu-Anh Nguyen, 2007. "With exhaustible resources, can a developing country escape from the poverty trap ?," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00203180, HAL.
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-17 (All new papers)
- NEP-DEV-2010-04-17 (Development)
- NEP-ENE-2010-04-17 (Energy Economics)
- NEP-ENV-2010-04-17 (Environmental Economics)
- NEP-LAM-2010-04-17 (Central & South America)
- NEP-RES-2010-04-17 (Resource Economics)
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