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Growth embedded in a finite Earth: The role of using and producing ideas

Author

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  • William Brock
  • Anastasios Xepapadeas

Abstract

This paper puts forth a growth model that takes into account the fact that the economy is embedded in a finite Earth. Economic activity uses services which are provided by the biosphere; however, this supply is finite. The question we explore in this paper is whether ideas that drive the accumulation of "brown" and "green" R&D that produces material goods which could be biosphere using or biosphere saving can provide persistent growth when the whole system is embedded in a finite Earth. Or, to put it differently, whether it is possible to have persistent growth supported by idea-driven technical change without violating the impact inequality proposed by Dasgupta (2021), which compares global demand for services provided by the biosphere to the supply of these services. We develop optimal time allocation models and provide conditions that support the feasibility of growth when the net impact on biosphere is zero.

Suggested Citation

  • William Brock & Anastasios Xepapadeas, 2025. "Growth embedded in a finite Earth: The role of using and producing ideas," DEOS Working Papers 2564, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:2564
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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