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Non-renewable resource depletion and reinvestment: issues and evidence for an oil-exporting country*

Published online by Cambridge University Press:  01 April 2009

BASSAM YOUSIF*
Affiliation:
Department of Economics, Indiana State University, Terre Haute, IN 47809, USA. Tel: 812-237-8628. Email: byousif@isugw.indstate.edu

Abstract

This essay offers a limited study of income sustainability for one oil-exporting country: Iraq. The nature of the study motivates a discussion of some theoretical issues concerning levels of non-renewable resource depletion and re-investment as well as related questions about the substitutability of man-made and natural capital and critical natural capital. The results of the study, which decomposes oil revenues into consumption and capital portions, suggest that the re-investment in physical capital offset the depletion of natural assets arising from oil extraction in the period under consideration. Because of the lack of data, a complete study of the capital balance is not feasible. Consequently the findings are tentative.

Type
Research Article
Copyright
Copyright © Cambridge University Press 2008

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