Transitional dynamics in an R&D-based growth model with natural resources

Thanh Le, Cuong Le Van

    Research output: Contribution to journalArticle

    4 Citations (Scopus)

    Abstract

    In this paper, we prove the existence and uniqueness of the optimal path for a resource endowed economy with R&D. This path converges to an optimal steady state, which is a saddle point, for each type of resources (renewable or non-renewable). In this steady state, a finite size resource sector coexists with other continuously growing sectors. In comparison, the corresponding decentralized equilibrium is suboptimal and there is either over- or under-investment in R&D from the social planner's perspective. At optimum, positive long-run growth will be sustained regardless type of resources used.

    Original languageEnglish
    Pages (from-to)1-17
    Number of pages17
    JournalMATHEMATICAL SOCIAL SCIENCES
    Volume82
    DOIs
    Publication statusPublished - 2016

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