Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate
AbstractConventional endogenous growth theory relies on the assumption of constant returns to ”broad capital”. As Solow pointed out, the strength of this assumption is revealed by recognizing that even the slightest touch of increasing returns creates explosive growth: infinite output in finite time! But Solow’s observation ignored natural resources. What happens if non-renewable resources enter the ”growth engine”? In this case (strictly) endogenous growth requires the technology to be such that there is no upper bound on the sustainable per capita growth rate.
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Bibliographic InfoPaper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 03-20.
Length: 11 pages
Date of creation: Jul 2003
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endogenous growth; semi-endogenous growth; non-renewable resources; knife-edge;
Other versions of this item:
- Groth Christian, 2004. "Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-15, May.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
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