Hostname: page-component-848d4c4894-cjp7w Total loading time: 0 Render date: 2024-07-05T01:32:04.287Z Has data issue: false hasContentIssue false

From time zero to infinity: transitional and long-run dynamics in capital–resource economies

Published online by Cambridge University Press:  19 September 2008

LUCAS BRETSCHGER
Affiliation:
CER-ETH Centre of Economic Research at ETH Zurich, ZUE F7, CH-8092 Zurich, Switzerland. Tel: +41 44 632 21 92, Fax: +41 44 632 13 62 Email: lbretschger@ethz.ch
KAREN PITTEL
Affiliation:
CER-ETH Centre of Economic Research at ETH Zurich, ZUE F12, CH-8092 Zurich, Switzerland. Tel: +41 44 632 06 12. Fax: +41 44 632 03 87 Email: kpittel@ethz.ch

Abstract

It is now generally agreed that the prediction of long-run development has to include natural resource use. To focus on the long run is, however, not equivalent to the use of balanced growth assumptions. It should be kept in mind that reaching a long-run equilibrium might take considerable time. Transition phases often exhibit characteristics which differ from the long-run state of the economy, but are important for its nature.

We discuss a number of different drivers that govern the transition to the steady state, including the development of stocks, substitution possibilities, savings decisions, and institutions. Based on this theoretical evaluation, we discuss five contributions of the conference on sustainable resource use and economic dynamics (SURED 2006) included in this special issue.

Type
Research Article
Copyright
Copyright © Cambridge University Press 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. (2003), ‘Labour- and capital-augmenting technical change’, Journal of the European Economic Association 1: 137.Google Scholar
Asheim, G. B., Buchholz, W., Hartwick, J. M., Mitra, T., and Withagen, C. (2007), ‘Constant savings rates and quasi-arithmetic population growth under exhaustible resource constraints’, Journal of Environmental Economics and Management 53: 213229.Google Scholar
Bovenberg, A. L. and Smulders, S. A. (1995), ‘Environmental quality and pollution-augmenting technical change in a two-sector endogenous growth model’, Journal of Public Economics 57: 369391.CrossRefGoogle Scholar
Bretschger, L. (1998), ‘How to substitute in order to sustain: knowledge driven growth under environmental restrictions’, Environment and Development Economics 3: 425442.Google Scholar
Bretschger, L. (2005), ‘Economics of technological change and the natural environment: how effective are innovations as a remedy for resource scarcity?’, Ecological Economics 54: 148163.CrossRefGoogle Scholar
Bretschger, L. and Smulders, J. A. (2006), ‘Sustainability and substitution of exhaustible natural resources: how resource prices affect long-term R&D-investments’, Economics Working Paper Series 03/26, ETH Zurich.Google Scholar
Christopoulos, D. and Tsionas, E. (2002), ‘Allocation inefficiency and the capital–energy controversy’, Energy Economics 24: 305318.CrossRefGoogle Scholar
Dasgupta, P. S. and Heal, G. (1974), ‘The optimal depletion of exhaustible resources’, Review of Economic Studies 41, Symposium on the Economics of Exhaustible Resources, 328.CrossRefGoogle Scholar
Dasgupta, P. S. and Heal, G. (1979), Economic Theory and Exhaustible Resources, Cambridge: Cambridge University Press.Google Scholar
Dasgupta, S., Laplante, B., Wang, H., and Wheeler, D. (2002), ‘Confronting the Environmental Kuznets Curve’, Journal of Economic Perspectives 16: 147168.CrossRefGoogle Scholar
De la Croix, D. and Doepke, M. (2003), ‘Inequality and growth: why differential fertility matters’, American Economic Review 93: 10911113.CrossRefGoogle Scholar
Egli, H. and Steger, T. M. (2007), ‘A dynamic model of the environmental Kuznet's curve’, Environmental and Resource Economics 36: 1534.CrossRefGoogle Scholar
Grimaud, A. and Rouge, L. (2003), ‘Non-renewable resources and growth with vertical innovations: optimum, equilibrium and economic policy’, Journal of Environmental Economics and Management 45: 433453.Google Scholar
Grossman, G. M. and Helpman, E. (1991), Innovation and Growth in the Global Economy, Cambridge, MA: The MIT Press.Google Scholar
Groth, C. (2007), ‘A new growth perspective on non-renewable resources’, in Bretschger, L. and Smulders, S. (eds), Sustainable Resource Use and Economic Dynamics, Dordrecht: Springer, pp. 127163.CrossRefGoogle Scholar
Groth, C. and Schou, P. (2002), ‘Can non-renewable resources alleviate the knife-edge character of endogenous growth?’, Oxford Economic Papers 54: 386411.Google Scholar
Hartwick, J. M. (1977), ‘Intergenerational equity and the investing of rents from exhaustible resources’, American Economic Review 67: 972974.Google Scholar
Hayashi, F. (1982), ‘Tobin's marginal q and average q: a neoclassical interpretation’, Econometrica 50: 213224.Google Scholar
Hotelling, H. (1931), ‘The economics of exhaustible resources’, The Journal of Political Economy 39: 137175.CrossRefGoogle Scholar
Jones, C. I. (1995), ‘R&D based models of economic growth’, Journal of Political Economy 103: 759784.CrossRefGoogle Scholar
Kemfert, C. (1998), ‘Estimated substitution elasticities of a nested CES production function for Germany’, Energy Economics 20: S249S264.CrossRefGoogle Scholar
Landon, J. (1990), Incentive Regulation in the Electric Utility Industry, San Francisco, CA: National Economic Research Associates.Google Scholar
Lieb, C. M. (2004), ‘The Environmental Kuznets Curve and flow versus stock pollution: the neglect of future damages’, Environmental and Resource Economics 29: 483506.CrossRefGoogle Scholar
López, R., Anriquez, G., and Gulati, S. (2007), ‘Structural change and sustainable development’, Journal of Environmental Economics and Management 53: 307322.CrossRefGoogle Scholar
Mankiw, N. G., Romer, D., and Weil, D. N. (1992), ‘A contribution to the empirics of economic growth’, Quarterly Journal of Economics 107: 407437.Google Scholar
Mehlum, H., Moene, K., and Torvik, R. (2006), ‘Institutions and the resource curse’, The Economic Journal 116: 120.CrossRefGoogle Scholar
Nordhaus, W. D. (1992), ‘Lethal model 2: the limits to growth revisited’, Brookings Papers on Economic Activity 2: 159.CrossRefGoogle Scholar
Pittel, K. (2002), Sustainability and Endogenous Growth, Cheltenham: Edward Elgar.Google Scholar
Rivera-Batiz, L. A. and Romer, P. M. (1991), ‘International trade with endogenous technological change’, European Economic Review 35: 9711001.CrossRefGoogle Scholar
Romer, P. M. (1990), ‘Endogenous technological change’, Journal of Political Economy 98: S71S102.CrossRefGoogle Scholar
Scholz, C. and Ziemes, G. (1999), ‘Exhaustible resources, monopolistic competition, and endogenous growth’, Environmental and Resource Economics 13: 169185.CrossRefGoogle Scholar
Smulders, J. A. (2000), ‘Economic growth and environmental quality’, in Folmer, H. and Gabel, H. L. (eds), Principles of Environmental and Resource Economics, Cheltenham: Edward Elgar, pp. 602664.Google Scholar
Smulders, J. A., Bretschger, L., and Egli, H. (2005), ‘Economic growth and the diffusion of clean technologies: explaining Environmental Kuznets Curves’, Economics Working Paper Series 05/42, ETH Zurich.CrossRefGoogle Scholar
Solow, R. (1974), ‘Intergenerational equity and exhaustible resources’, Review of Economic Studies 41, Symposium on the Economics of Exhaustible Resources, 2946.Google Scholar
Steger, T. M. (2007), ‘Flexibility, sectoral hysteresis, and downturns’, Macroeconomic Dynamics 11: 128148.CrossRefGoogle Scholar
Stern, D. I. (2004), ‘The rise and fall of the Environmental Kuznets Curve’, World Development 32: 14191439.CrossRefGoogle Scholar
Stiglitz, J. (1974), ‘Growth with exhaustible natural resources: efficient and optimal growth paths’, Review of Economic Studies 41, Symposium on the Economics of Exhaustible Resources, 123137.CrossRefGoogle Scholar
Tamura, R. (2000), ‘Growth, fertility and human capital: a survey’, Spanish Economic Review 2: 183229.Google Scholar
Xepapadeas, A. (2005), ‘Economic growth and the environment’, in Mäler, K.-G. and Vincent, J. R. (eds), Handbook of Environmental Economics 3, Amsterdam: Elsevier, pp. 12191271.Google Scholar