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Capital accumulation and resources depletion - a Hartwick rule counterfactual

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Listed:
  • Hamilton, Kirk
  • Ruta, Giovanni
  • Tajibaeva, Liaila

Abstract

How rich would resource-abundant countries be if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the past 30 years? The authors use time series data on investments and rents onexhaustible resource extraction for 70 countries to answer this question. The results are striking: Gabon, Trinidad and Tobago, and Venezuela would all be as wealthy as the Republic of Korea, while Nigeria would be five times as well off as it is currently. The authors also derive a more general rule for sustainability-maintain positive constant genuine investment-and use this to draw further empirical results.

Suggested Citation

  • Hamilton, Kirk & Ruta, Giovanni & Tajibaeva, Liaila, 2005. "Capital accumulation and resources depletion - a Hartwick rule counterfactual," Policy Research Working Paper Series 3480, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3480
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    More about this item

    Keywords

    International Terrorism&Counterterrorism; Economic Theory&Research; Fiscal&Monetary Policy; Capital Markets and Capital Flows; Decentralization; Economic Theory&Research; Environmental Economics&Policies; International Terrorism&Counterterrorism; Economic Growth; Banks&Banking Reform;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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