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The Hartwick Rule : Myths and Facts

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  • Asheim, G.B.
  • Buchholz, W.
  • Withagen, C.A.A.M.

Abstract

We consider the Hartwick rule for capital accumulation and resource depletion, provide semantic clarifications and investigate whether this rule indicates sustainability and requires substitutability between manmade and natural capital. In addition to shedding light on the meaning of the Hartwick rule by reviewing established results, we establish the following novel finding: The value of net investments being negative does not imply that utility is unsustainable. Throughout we make the assumption of a constant technology, without which the Hartwick rule does not apply.
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Suggested Citation

  • Asheim, G.B. & Buchholz, W. & Withagen, C.A.A.M., 2002. "The Hartwick Rule : Myths and Facts," Other publications TiSEM a4f96369-ea27-4f6c-882a-1, Tilburg University, School of Economics and Management.
    • Handle: RePEc:tiu:tiutis:a4f96369-ea27-4f6c-882a-17546bfec317
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    1. Avinash Dixit & Peter Hammond & Michael Hoel, 1980. "On Hartwick's Rule for Regular Maximin Paths of Capital Accumulation and Resource Depletion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 551-556.
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    More about this item

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

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