Research of Impact of Natural Resources Wealth on Economic Development and Human Capital Using Marx’s Production Scheme

Yadulla Hasanli

No 7083, EcoMod2014 from EcoMod

Abstract: The purpose of the research is to unveil conditions for sustainable development by studying relationship between natural (I) and non-natural (II) wealth based on Carl Marx’ re-production scheme. General Equilibrium Model extented to Marx's Production Schema Realization results of the model showed that the growth of the oil industry's tend to be higher than non-oil sector . The process continues in this manner creates the move toward an increase in the income share of the oil sector . This leads to the one-sided development of the economy ( in the oil sector ) that is regarded as a sign of "Dutch disease". Note that natural resources ( natural capital ) by its nature can be divided into renewable and nonrenewable resources . Renewable natural resources ( natural capital ) , for example , is water. For nonrenewable resources can be show as oil, gas and ferrous metals. The volume of production of oil and gas resources are falling sharply after the exhaustion of these resources. Thus, physical capital and labor resources gathered in the oil and gas sector ( human capital ) is ineffective , therefore, the capital , as well as low levels of the workforce is employed. The main reasons for the growth of the income in oil sector compared to th other sectors is that natural resouces not fully paid for their contribution in total income. This factor reduces the demand in oil sector for the of non-oil sector, and in turn the growth rate of non-oil sector comes down. From our scheme it becomes clear that repayment of money to the the restoration of natural capital from share of income in the oil sector could be the main condition for the balanced development of the economy .

Keywords: Azerbaijan; General equilibrium modeling (CGE); Impact and scenario analysis (search for similar items in EconPapers)
Date: 2014-07-03
New Economics Papers: this item is included in nep-ene and nep-gro
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Persistent link: https://EconPapers.repec.org/RePEc:ekd:006356:7083

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