Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate
Conventional 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. This corroborates Solow's skepticism.
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Volume (Year): 4 (2004)
Issue (Month): 1 (May)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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00-02, University of Copenhagen. Department of Economics.
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