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The implications of heterogeneous resource intensities on technical change and growth [Les implications de l’hétérogénéité des intensités dans l’usage des ressources naturelles sur le changement technique et la croissance]

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  • Pittel, Karen
  • Bretschger, Lucas

Abstract

We analyze the long-term dynamics of an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. It is shown that heterogeneity induces technical change to be biased towards resource-intensive sectors. Along the balanced growth path, the sectoral structure of the economy is constant as the higher resource dependency in resource-intensive sectors is compensated by enhanced research activities. Resource taxes have no impact on dynamics except when the tax rate varies over time. Research subsidies and the sectoral provision of productivity-enhancing public goods raise growth and provide an effective tool for structural policy.

Suggested Citation

  • Pittel, Karen & Bretschger, Lucas, 2010. "The implications of heterogeneous resource intensities on technical change and growth [Les implications de l’hétérogénéité des intensités dans l’usage des ressources naturelles sur le changement techn," Munich Reprints in Economics 19356, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:19356
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