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Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual

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  • Kirk Hamilton

    ()

  • Giovanni Ruta
  • Liaila Tajibaeva

Abstract

How much produced capital would resource-abundant countries have today if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the last 30 years? We employ time series data on investment and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Venezuela, Trinidad and Tobago, and Gabon would all have as much produced capital as South Korea, while Nigeria would have five times its current level. A specific rule for sustainability – maintain positive constant genuine investment – is shown to lead to unbounded consumption. Copyright Springer 2006

Suggested Citation

  • Kirk Hamilton & Giovanni Ruta & Liaila Tajibaeva, 2006. "Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(4), pages 517-533, August.
  • Handle: RePEc:kap:enreec:v:34:y:2006:i:4:p:517-533
    DOI: 10.1007/s10640-006-0011-2
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    References listed on IDEAS

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    More about this item

    Keywords

    Hartwick rule; exhaustible resources; sustainable development; Q01; Q32; Q56;

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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