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Renewable Natural Resources And Endogenous Growth

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  • AZNAR-MÁRQUEZ, J.
  • RUIZ-TAMARIT, J.R.

Abstract

We study the sustainability of long-run growth in a two-sector economy where a renewable natural resource is exploited under private property rights. We obtain short- and long-run growth trajectories in closed form, examine transitional dynamics, and characterize convergence properties. We find conditions for sustainable long-run growth, which depend on the harvesting rate, and show that the speed of convergence decreases during transition. We identify a stronger version of Hartwick's rule and analyze parameter dependences for endogenous variables. Economic growth relies less on abundance or scarcity of natural resources than on the way they are managed.

Suggested Citation

  • Aznar-Márquez, J. & Ruiz-Tamarit, J.R., 2005. "Renewable Natural Resources And Endogenous Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 9(2), pages 170-197, April.
    • Handle: RePEc:cup:macdyn:v:9:y:2005:i:02:p:170-197_04
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    References listed on IDEAS

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    1. J. AZNAR-MARQUEZ & J.R. Ruiz-Tamarit, 2002. "Closed-Form Solution for a Two-Sector Endogenous Growth Model with two Controls," LIDAM Discussion Papers IRES 2002030, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Thorvaldur Gylfason & Gylfi Zoega, 2006. "Natural Resources and Economic Growth: The Role of Investment," The World Economy, Wiley Blackwell, vol. 29(8), pages 1091-1115, August.
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    7. Auty, Richard M., 2001. "The political economy of resource-driven growth," European Economic Review, Elsevier, vol. 45(4-6), pages 839-846, May.
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    9. Gylfason, Thorvaldur & Herbertsson, Tryggvi Thor & Zoega, Gylfi, 1997. "A Mixed Blessing: Natural Resources and Economic Growth," CEPR Discussion Papers 1668, C.E.P.R. Discussion Papers.
    10. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
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    Cited by:

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    3. Meran, Georg, 2023. "Is green growth possible and even desirable in a spaceship economy?," Ecological Economics, Elsevier, vol. 213(C).
    4. Bretschger, Lucas & Valente, Simone, 2018. "Productivity Gaps And Tax Policies Under Asymmetric Trade," Macroeconomic Dynamics, Cambridge University Press, vol. 22(6), pages 1391-1427, September.
    5. Voosholz, Frauke, 2014. "A survey on modeling economic growth. With special interest on natural resource use," CAWM Discussion Papers 69, University of Münster, Münster Center for Economic Policy (MEP).
    6. de Freitas, Maurício Assuero Lima & Stamford da Silva, Alexandre, 2013. "The influence of the healthcare system on optimal economic growth," Economic Modelling, Elsevier, vol. 35(C), pages 734-742.
    7. José Ramón Ruiz Tamarit & Manuel Sánchez Moreno, 2006. "Optimal Regulation And Growth In A Natural-Resource-Based Economy," Working Papers. Serie AD 2006-21, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    8. Valente, Simone, 2011. "Endogenous Growth, Backstop Technology Adoption, And Optimal Jumps," Macroeconomic Dynamics, Cambridge University Press, vol. 15(3), pages 293-325, June.
    9. Wang, Yi-Chia & Chuang, Yih-Chyi, 2011. "Environmental resilience and economic growth: Command economy's optimization and environmental Kuznets curve," Economic Modelling, Elsevier, vol. 28(6), pages 2854-2861.
    10. J. AZNAR-MARQUEZ & J.R. Ruiz-Tamarit, 2002. "Closed-Form Solution for a Two-Sector Endogenous Growth Model with two Controls," LIDAM Discussion Papers IRES 2002030, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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    More about this item

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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