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Depletion of Natural Resources and Long-term Perspectives of the Russian Economy

Author

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  • Eismont Oleg

    ()

  • Kuralbaeva Karlygash

    ()

Abstract

A long-term analysis of the economic development of a resource-exporting country is presented. Two kinds of models have been used: single-sector and two-to-three sector models. Within the single-sector model, the effects of the uncertainty of world resource prices, of the constraints of natural resources on export capacities, and of the impact of foreign assets on the economy of a resource-exporting country have been analyzed. Two- and three-sector models were used to study the effects of the positive externality resulting from the accumulation of knowledge in the manufacturing sector, and of resource depletion. The main results obtained are as follows. An increasing world natural resource price leads, in the long-term perspective, to decreasing rates of economic growth of a resource-exporting country. The higher the share of a natural resource sectors the lower the equilibrium growth rate of GDP of a resource-rich country.

Suggested Citation

  • Eismont Oleg & Kuralbaeva Karlygash, 1999. "Depletion of Natural Resources and Long-term Perspectives of the Russian Economy," EERC Working Paper Series 99-07e, EERC Research Network, Russia and CIS.
  • Handle: RePEc:eer:wpalle:99-07e
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    References listed on IDEAS

    as
    1. Pindyck, Robert S., 1980. "The optimal production of an exhaustible resource when price is exogenous and stochastic," Working papers 1162-80., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    2. Geoffrey Heal, 1976. "The Relationship Between Price and Extraction Cost for a Resource with a Backstop Technology," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 371-378, Autumn.
    3. Sachs, J-D & Warner, A-M, 1995. "Natural Resource Abundance and Economic Growth," Papers 517a, Harvard - Institute for International Development.
    4. Robert M. Solow & Frederic Y. Wan, 1976. "Extraction Costs in the Theory of Exhaustible Resources," Bell Journal of Economics, The RAND Corporation, vol. 7(2), pages 359-370, Autumn.
    5. Casey B. Mulligan & Xavier Sala-i-Martin, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, pages 739-773.
    6. Farzin, Y H, 1992. "The Time Path of Scarcity Rent in the Theory of Exhaustible Resources," Economic Journal, Royal Economic Society, vol. 102(413), pages 813-830, July.
    7. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, pages 317-334.
    8. Gomulka, S. & Lane, J., 1997. "Recession dynamics following an external price shock in a transition economy," Structural Change and Economic Dynamics, Elsevier, vol. 8(2), pages 177-203, June.
    9. Pindyck, Robert S, 1981. " The Optimal Production of an Exhaustible Resource When Price is Exogenous and Stochastic," Scandinavian Journal of Economics, Wiley Blackwell, pages 277-288.
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    11. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, pages 3-42.
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    Cited by:

    1. William A. Barnett & Chang Ho Kwag, 2011. "Exchange Rate Determination from Monetary Fundamentals: An Aggregation Theoretic Approach," World Scientific Book Chapters,in: Financial Aggregation And Index Number Theory, chapter 5, pages 151-166 World Scientific Publishing Co. Pte. Ltd..
    2. Dreher, Axel & Vaubel, Roland, 2009. "Foreign exchange intervention and the political business cycle: A panel data analysis," Journal of International Money and Finance, Elsevier, vol. 28(5), pages 755-775, September.

    More about this item

    Keywords

    Dutch disease; endogenous economic growth;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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