Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate
Conventional endogenous growth theory relies on the assumption of constant returns to ”broad capital”. As Solow pointed out, the strength of this assumption is revealed by recognizing that even the slightest touch of increasing returns creates explosive growth: infinite output in finite time! But Solow’s observation ignored natural resources. What happens if non-renewable resources enter the ”growth engine”? In this case (strictly) endogenous growth requires the technology to be such that there is no upper bound on the sustainable per capita growth rate.
|Date of creation:||Jul 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (+45) 3532 4411
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/epru/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June.
- Larry E. Jones & Rodolfo E. Manuelli, 1994.
"The Sources of Growth,"
9411002, EconWPA, revised 05 Mar 1999.
- Groth, C. & Schou, P., 2000.
"Can Nonrenewable Resources Alleviate the Knife-Edge Character of Endogenous Growth,"
00-02, Carleton - School of Public Administration.
- Christian Groth & Poul Schou, 2002. "Can non-renewable resources alleviate the knife-edge character of endogenous growth?," Oxford Economic Papers, Oxford University Press, vol. 54(3), pages 386-411, July.
- Christian Groth & Poul Schou, 2000. "Can Nonrenewable Resources Alleviate the Knife-edge Character of Endogenous Growth," Discussion Papers 00-02, University of Copenhagen. Department of Economics.
- Christian Groth, 2000. "Can Nonrenewable Resources Alleviate the Knife-edge Character of Endogenous Growth?," Econometric Society World Congress 2000 Contributed Papers 1480, Econometric Society.
- Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
- William D. Nordhaus, 1992. "Lethal Model 2: The Limits to Growth Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 1-60.
- Suzuki, Hideo, 1976. "On the Possibility of Steadily Growing per capita Consumption in an Economy with a Wasting and Non-Replenishable Resource," Review of Economic Studies, Wiley Blackwell, vol. 43(3), pages 527-35, October.
When requesting a correction, please mention this item's handle: RePEc:kud:epruwp:03-20. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Hoffmann)
If references are entirely missing, you can add them using this form.