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The Hartwick rule and the characterization of constant consumption paths in the presence of an exhaustible resource

Author

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  • Vincent MARTINET

    (THEMA, Department of Economics, Universit´e de Paris X-Nanterre, 200 av. de la R´epublique, 92001 Nanterre Cedex, France)

Abstract

This paper deals with the interpretation of the Hartwick rule in the particular Dasgupta-Heal-Solow model with one capital good and one non-renewable resource. It is argued that the rule is more a descriptive property of constant consumption paths than a sustainability indicator. It is shown that investing the rents from the resource use into man-made capital is a necessary condition for an efficient resource depletion but it is not a sufficient condition for sustainability. A sustainable consumption indicator is described to characterize the sustainability of constant consumption paths.

Suggested Citation

  • Vincent MARTINET, 2005. "The Hartwick rule and the characterization of constant consumption paths in the presence of an exhaustible resource," THEMA Working Papers 2005-06, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2005-06
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    Cited by:

    1. Martinet, Vincent, 2007. "A step beside the maximin path: Can we sustain the economy by following Hartwick's investment rule?," Ecological Economics, Elsevier, vol. 64(1), pages 103-108, October.

    More about this item

    Keywords

    Hartwick rule; non-renewable resources; sustainable consumption.;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • D99 - Microeconomics - - Micro-Based Behavioral Economics - - - Other

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