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Complementarity, impatience, and the resilience of natural-resource-dependent economies

Author

Listed:
  • Martin F. Quaas

    () (Department of Economics, University of Kiel, Germany)

  • Daan van Soest

    (VU University Amsterdam and Tilburg University, The Netherlands)

  • Stefan Baumgaertner

    (Department of Sustainability Sciences and Department of Economics, Leuphana University of Lueneburg, Germany)

Abstract

We study how human preferences a ect the resilience of economies that depend on more than one type of natural resources. In particular, we analyze whether the degree of substitutability of natural resources in consumer needs may give rise to multiple steady states and path dependence even when resources are managed optimally. This is a major shift in the interpretation and analysis of resilience, from viewing (limited) resilience as an objective property of the economy-environment system to acknowledging its partially subjective, preference-based character. We nd that society tends to be less willing to bu er exogenous shocks if resource goods are complements in consumption than if they are substitutes. Hence, the stronger the complementarity between the various types of resource goods, the less resilient the economy is.

Suggested Citation

  • Martin F. Quaas & Daan van Soest & Stefan Baumgaertner, 2011. "Complementarity, impatience, and the resilience of natural-resource-dependent economies," Working Paper Series in Economics 220, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:220
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Gustav Engström & Johan Gars, 2016. "Climatic Tipping Points and Optimal Fossil-Fuel Use," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(3), pages 541-571, November.
    2. Richter, Andries & Dakos, Vasilis, 2015. "Profit fluctuations signal eroding resilience of natural resources," Ecological Economics, Elsevier, vol. 117(C), pages 12-21.
    3. Shao, Shuai & Yang, Lili, 2014. "Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing," Energy Policy, Elsevier, vol. 74(C), pages 632-642.
    4. repec:kap:enreec:v:67:y:2017:i:1:d:10.1007_s10640-015-9976-z is not listed on IDEAS
    5. Gars, Johan & Spiro, Daniel, 2014. "Uninsurance through Trade," Memorandum 13/2014, Oslo University, Department of Economics.

    More about this item

    Keywords

    Resilience; substitutes and complements; discounting; multiple steady states; natural resources; path dependence; regime shifts; tipping points;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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