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Population Growth and Natural Resource Scarcity: Long run development under seemingly unfavourable conditions

  • Lucas Bretschger

The paper considers an economy which is constrained by natural resource use and driven by knowledge accumulation. Resources are essential inputs in all the sectors. It is shown that population growth and poor input substitution are not detrimental but, on the contrary, even necessary for obtaining a sustainable consumption level. We find a new type of Hartwick rule defining the conditions for a constant innovation rate. The rule does not apply to capital but to labour growth, the crucial input in research. Furthermore, it relates to the sectoral structure of the economy and to demographic transition. The results continue to hold with a backstop technology and are extended for the case of minimum resource constraints.

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File URL: http://www.oxcarre.ox.ac.uk/images/stories/papers/ResearchPapers/oxcarrerp201037.pdf
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Paper provided by Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford in its series OxCarre Working Papers with number 037.

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Date of creation: 2010
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Handle: RePEc:oxf:oxcrwp:037
Contact details of provider: Postal: Manor Road, Oxford, OX1 3UQ
Web page: http://www.oxcarre.ox.ac.uk/
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  7. Heal, G., 1990. "The Optimal Use Of Exhaustible Resources," Papers fb-_90-10, Columbia - Graduate School of Business.
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  9. Geir B. Asheim & Wolfgang Buchholz & John M. Hartwick & Tapan Mitra & Cees A. Withagen, 2005. "Constant Savings Rates and Quasi-Arithmetic Population Growth under Exhaustible Resource Constraints," CESifo Working Paper Series 1573, CESifo Group Munich.
  10. Martin L. Weitzman, 1998. "Recombinant Growth," The Quarterly Journal of Economics, MIT Press, vol. 113(2), pages 331-360, May.
  11. Grimaud, Andre & Rouge, Luc, 2003. "Non-renewable resources and growth with vertical innovations: optimum, equilibrium and economic policies," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 433-453, March.
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  16. Lopez, Ramon E. & Anriquez, Gustavo & Gulati, Sumeet, 2007. "Structural change and sustainable development," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 307-322, May.
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