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The economics of natural resources: Understanding and predicting the evolution of supply and demand

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  • Hart, Rob

    () (Department of Economics, Swedish University of Agricultural Sciences)

Abstract

We develop a dynamic model of prices and quantities of non-renewable resources, carefully justifying our assumptions. Resource stocks are inhomogeneous, and there is endogenous directed technological change both in extraction and final-good production. The model explains stylized facts while simultaneously providing a framework for prediction; it yields analytical results in the baseline case, and may be developed to make empirical predictions about real resources. In the baseline case the economy passes through a series of phases: initially resource consumption is low; as technology improves, resource consumption rises and real resource price is constant; in the long run there is a transition to a b.g.p. on which resource consumption is constant and resource price tracks the wage.

Suggested Citation

  • Hart, Rob, 2012. "The economics of natural resources: Understanding and predicting the evolution of supply and demand," Working Paper Series 2012:01, Swedish University of Agricultural Sciences, Department Economics.
    • Handle: RePEc:hhs:slueko:2012_001
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    References listed on IDEAS

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    Cited by:

    1. Gregor Schwerhoff & Martin Stuermer, 2015. "Non-renewable resources, extraction technology, and endogenous growth," Working Papers 1506, Federal Reserve Bank of Dallas.
    2. Stuermer, Martin & Schwerhoff, Gregor, 2013. "Technological change in resource extraction and endogenous growth," Bonn Econ Discussion Papers 12/2013, University of Bonn, Bonn Graduate School of Economics (BGSE).

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    More about this item

    Keywords

    Directed technological change; Natural resources; Hotelling rule.;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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