Transitional Dynamics in an R&D-based Growth Model with Natural Resources

Thanh Le and Cuong Le van

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: Upon introducing natural resources, both renewable and non-renewable, into an endogenous growth framework with R&D, this paper derives the transitional dynamics of an economy towards its long-run equilibrium. Using the Euler - Lagrange framework, this paper has succesfully figured out the optimal paths of the economy. It then shows the existence and uniqueness of a balanced growth path for each type of resources. The steady state is shown to be of a saddle point stability. Along the balanced growth path, it is found that a finite size resource sector coexists with other continuously growing sectors. The paper then examines long-run responses of the economy to various changes pertaining to innovative production condition, resource sector parameters as well as rate of time preference. It also shows that positive long-run growth will be sustained regardless the type of resources used.

Keywords: R&D-based growth; natural resources; vertical innovation; transitional dynamics (search for similar items in EconPapers)
Date: 2014-10
New Economics Papers: this item is included in nep-ene, nep-gro and nep-ino
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01114589
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Published in 2014

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Related works:
Journal Article: Transitional dynamics in an R&D-based growth model with natural resources (2016)
Working Paper: Transitional dynamics in an R&D-based growth model with natural resources (2016)
Working Paper: Transitional dynamics in an R&D-based growth model with natural resources (2016)
Working Paper: Transitional dynamics in an R&D-based growth model with natural resources (2016)
Working Paper: Transitional Dynamics in an R&D-based Growth Model with Natural Resources (2014)
Working Paper: Transitional Dynamics in an R&D-based Growth Model with Natural Resources (2014)
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