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Limits to growth and structural change

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  • Germain, Marc

Abstract

This paper examines the path of an economy constrained by bio-physical limits, due to (i) limited natural capital availability and (ii) compliance with the postulate of strong sustainability. The economy tends towards a stationary state characterized by lower and higher endowments of natural capital and human factors respectively than in the initial state. But this evolution is not monotonous in the sense that GDP and consumption have a path in four phases: growth, reversal, decrease and a quasi-stationary phase leading to steady state. On the contrary, the natural capital stock is declining almost monotonically, involving increasing natural capital operating costs. This results in a structural change by which the human factors share devoted to exploitation increases continuously at the expense of that devoted to final production. Taking pollution into account results in a peak of GDP less pronounced and advanced over time compared to the pollution-free situation.

Suggested Citation

  • Germain, Marc, 2020. "Limits to growth and structural change," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 204-221.
    • Handle: RePEc:eee:streco:v:55:y:2020:i:c:p:204-221
    DOI: 10.1016/j.strueco.2020.07.004
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    Citations

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    Cited by:

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    2. Marc Germain, 2022. "Limits to green growth [Des limites à la croissance verte]," Working Papers hal-03913177, HAL.
    3. Marc Germain, 2021. "Limites à la croissance et destruction créatrice dans le cadre d'un modèle à générations de capital," Working Papers 2021.14, FAERE - French Association of Environmental and Resource Economists.

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    More about this item

    Keywords

    Limits to growth; Strong sustainability; Structural change;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • 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
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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