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RENEWABLE NATURAL RESOURCES AND ENDOGENOUS GROWTH

Published online by Cambridge University Press:  28 April 2005

J. AZNAR-MÁRQUEZ  and
J.R. RUIZ-TAMARIT
J. AZNAR-MÁRQUEZ
Affiliation:
Universitat Miguel Hernández d'Elx
J.R. RUIZ-TAMARIT
Affiliation:
Universitat de València and IRES, Université Catholique de Louvain
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Abstract

We study the sustainability of long-run growth in a two-sector economy where a renewable natural resource is exploited under private property rights. We obtain short- and long-run growth trajectories in closed form, examine transitional dynamics, and characterize convergence properties. We find conditions for sustainable long-run growth, which depend on the harvesting rate, and show that the speed of convergence decreases during transition. We identify a stronger version of Hartwick's rule and analyze parameter dependences for endogenous variables. Economic growth relies less on abundance or scarcity of natural resources than on the way they are managed.

Keywords

Natural CapitalEndogenous GrowthSustainabilityConvergence
Type
ARTICLES
Information
Macroeconomic Dynamics , Volume 9 , Issue 2 , April 2005 , pp. 170 - 197
Copyright
© 2005 Cambridge University Press

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