Abstract
This paper develops an endogenous growth model to study how different types of natural resources - namely renewable versus non-renewable - affect sustainable growth and welfare. In a decentralized equilibrium setting, we find that negative growth may occur in an economy endowed with non-renewable resources. To escape from this stagnant growth, the research sector must be highly productive. However, non-renewable resources are not necessarily dominated by their renewable counterparts in terms of resulting output growth and welfare. We also characterize analytically and quantitatively equilibrium paths to evaluate growth and welfare implications resulting from a resource type switch that is caused by an adverse environmental shock.
Original language | English |
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Pages (from-to) | 215-229 |
Number of pages | 15 |
Journal | Economic Modelling |
Volume | 70 |
DOIs | |
Publication status | Published - Apr 2018 |
Keywords
- Non-renewable resources
- R&D-based growth
- Renewable resources
- Stagnant growth
- Vertical innovation