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Natural resource scarcity and technological change


  • Stephen P.A. Brown
  • Daniel Wolk


Nonrenewable natural resources, such as aluminum and crude oil, exist only in fixed amounts on Earth. Consequently, some observers are concerned that natural resource scarcity will eventually limit future economic growth and human well-being. Others remain optimistic that technological change will overcome geophysical scarcity. Brown and Wolk examine the evidence for natural resource scarcity and find that over the past century reliance on free markets has promoted sufficient technological change to overcome geophysical scarcity for most nonrenewable natural resources. Rather than rising--as would result from increased scarcity--the relevant real prices of most nonrenewable natural resources have fallen. Although declines in real prices have moderated since World War II, the authors find little evidence of increased scarcity in the postwar era. Increased reliance on markets during the closing decades of the twentieth century is cause for optimism that these trends will continue in the twenty-first.

Suggested Citation

  • Stephen P.A. Brown & Daniel Wolk, 2000. "Natural resource scarcity and technological change," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q1, pages 2-13.
  • Handle: RePEc:fip:fedder:y:2000:i:q1:p:2-13

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    References listed on IDEAS

    1. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," Review of Economic Studies, Oxford University Press, vol. 34(3), pages 249-283.
    2. Brown, Gardner M, Jr & Field, Barry C, 1978. "Implications of Alternative Measures of Natural Resource Scarcity," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 229-243, April.
    3. Slade, Margaret E., 1982. "Trends in natural-resource commodity prices: An analysis of the time domain," Journal of Environmental Economics and Management, Elsevier, vol. 9(2), pages 122-137, June.
    4. Solow, Robert M, 1974. "The Economics of Resources or the Resources of Economics," American Economic Review, American Economic Association, vol. 64(2), pages 1-14, May.
    5. Nordhaus, William D, 1973. "World Dynamics: Measurement Without Data," Economic Journal, Royal Economic Society, vol. 83(332), pages 1156-1183, December.
    6. Ronald H. Schmidt, 1988. "Hotelling's rule repealed? An examination of exhaustible resource pricing," Economic Review, Federal Reserve Bank of San Francisco, issue Fall, pages 41-54.
    7. Berck, Peter & Roberts, Michael, 1996. "Natural Resource Prices: Will They Ever Turn Up?," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 65-78, July.
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    Cited by:

    1. Bartleet, Matthew & Gounder, Rukmani, 2010. "Energy consumption and economic growth in New Zealand: Results of trivariate and multivariate models," Energy Policy, Elsevier, vol. 38(7), pages 3508-3517, July.
    2. Sohn, Ira, 2005. "Long-term projections of non-fuel minerals: We were wrong, but why?," Resources Policy, Elsevier, vol. 30(4), pages 259-284, December.
    3. Joachim Wuermeling & Wulf H. Bernotat & Ulrich Grillo & Werner Bohnenschäfer & Jochen Weise, 2007. "Energiemangel - Rohstoffknappheit: Welche mittelfristigen Perspektiven hat die deutsche Wirtschaft?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 60(05), pages 03-19, March.
    4. Berry, David, 2005. "Renewable energy as a natural gas price hedge: the case of wind," Energy Policy, Elsevier, vol. 33(6), pages 799-807, April.

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