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Endogenous Growth and Property Rights over Renewable Resources

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  • Nujin Suphaphiphat
  • Pietro F. Peretto
  • Simone Valente

Abstract

We analyze the general-equilibrium effects of alternative regimes of access rights over renewable natural resources – namely, open access versus full property rights on the pace of development when economic growth is endogenously driven by both horizontal and vertical innovations. Resource exhaustion may occur under both regimes but is more likely to arise under open access. Under full property rights, positive resource rents increase expenditures and temporarily accelerate productivity growth, but also yield a higher resource price at least in the short-to-medium run. We characterize analytically the welfare effect of a regime switch induced by a failure in property rights enforcement: switching to open access is welfare reducing if the utility gain generated by the initial drop in the resource price is more than offset by the static and dynamic losses induced by reduced expenditure.

Suggested Citation

  • Nujin Suphaphiphat & Pietro F. Peretto & Simone Valente, 2013. "Endogenous Growth and Property Rights over Renewable Resources," Working Papers 13-11, Duke University, Department of Economics.
  • Handle: RePEc:duk:dukeec:13-11
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    References listed on IDEAS

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    Cited by:

    1. Le, Thanh & Le Van, Cuong, 2016. "Transitional dynamics in an R&D-based growth model with natural resources," Mathematical Social Sciences, Elsevier, pages 1-17.

    More about this item

    Keywords

    Endogenous growth; Innovation; Renewable Resources; Sustainable Development; Property Rights;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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