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On technical change in the elasticities of resource inputs

  • Growiec, Jakub
  • Schumacher, Ingmar

This article analyses growth of an economy where the substitutability between non-renewable and renewable resource inputs changes over time. We allow for exogenous technical change in the elasticity of substitution (EoS) between these two types of resources as well as for biased factor-augmenting technical change. Our main results are: (1) sustained technical change in the EoS is enough to overcome resource constraints; (2) productivity-enhancing technical change is most beneficial when directed to the resource which is currently most important for production; (3) the speed of productivity-enhancing technical change is crucial for its usefulness to overcome resource constraints; (4) sustainability depends critically on the type of technical change.

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Article provided by Elsevier in its journal Resources Policy.

Volume (Year): 33 (2008)
Issue (Month): 4 (December)
Pages: 210-221

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Handle: RePEc:eee:jrpoli:v:33:y:2008:i:4:p:210-221
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/30467

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  1. Lucas Bretschger, 2003. "Economics of technological change and the natural environment: how effective are innovations as a remedy for resource scarcity?," CER-ETH Economics working paper series 03/27, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich, revised Jun 2004.
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  6. Growiec, Jakub & Schumacher, Ingmar, 2008. "On technical change in the elasticities of resource inputs," Resources Policy, Elsevier, vol. 33(4), pages 210-221, December.
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  13. AMIGUES Jean-Pierre & MOREAUX Michel & RICCI Francesco, 2006. "Overcoming the Natural Resource Constraint Through Dedicated R&D Effort with Heterogenous Labor Supply," LERNA Working Papers 06.22.215, LERNA, University of Toulouse.
  14. Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June.
  15. Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June.
  16. Andre, Francisco J. & Cerda, Emilio, 2005. "On natural resource substitution," Resources Policy, Elsevier, vol. 30(4), pages 233-246, December.
  17. de La Grandville, Olivier, 1989. "Erratum [In Quest of the Slutsky Diamond]," American Economic Review, American Economic Association, vol. 79(5), pages 1307, December.
  18. 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.
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