Renewable Resources In An Endogenously Growing Economy: Balanced Growth And Transitional Dynamics
AbstractWe introduce a renewable resource sector into an endogenous growth model of a small economy, deriving the transitional dynamic equilibrium. The model generates a long-run balanced growth path along which a resource sector of limited size can coexist with constant ongoing growth elsewhere. The key feature of the model is the allocation of labor between harvesting the resource and its use in the final output sector. We examine both the dynamic and long-run responses of the economy to various shocks pertaining to technological production conditions and resource sector parameters and show how they can generate sharply contrasting transitional adjustment paths.
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Bibliographic InfoPaper provided by Department of Economics, Central bank of Iceland in its series Economics with number wp20_ludvik.
Date of creation: Nov 2002
Date of revision:
Other versions of this item:
- Eliasson, Ludvik & Turnovsky, Stephen J., 2004. "Renewable resources in an endogenously growing economy: balanced growth and transitional dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 48(3), pages 1018-1049, November.
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