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Technological change in resource extraction and endogenous growth

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  • Stuermer, Martin
  • Schwerhoff, Gregor

Abstract

We add an extractive sector to an endogenous growth model of expanding varieties and directed technological change. Extractive firms reduce the stock of non-renewable resources through extraction, but also increase the stock through R&D investment in extraction technology. Our model replicates long-term trends in non-renewable resource markets, namely stable prices and exponentially increasing extraction, for which we present data from 1792 to 2009. The model suggests that the development of new extraction technologies neutralizes the increasing demand for non-renewable resources in industrializing countries like China in the long term.

Suggested Citation

  • Stuermer, Martin & Schwerhoff, Gregor, 2013. "Technological change in resource extraction and endogenous growth," Bonn Econ Discussion Papers 12/2013, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:122013
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    Cited by:

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    3. Maciej Malaczewski, 2017. "Warunki przejścia gospodarki na odnawialne źródła energii," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 33-51.
    4. Tamasiga, Phemelo & Bondarev, Anton, 2014. "Differential games approach to trade with exhaustible resources," Working papers 2014/14, Faculty of Business and Economics - University of Basel.

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    More about this item

    Keywords

    Non-renewable resources; endogenous growth; extraction technology;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General

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