The economics of natural resources: Understanding and predicting the evolution of supply and demand

Rob Hart

No 2012:01, Working Paper Series from Swedish University of Agricultural Sciences, Department Economics

Abstract: We develop a dynamic model of prices and quantities of non-renewable resources, carefully justifying our assumptions. Resource stocks are inhomogeneous, and there is endogenous directed technological change both in extraction and final-good production. The model explains stylized facts while simultaneously providing a framework for prediction; it yields analytical results in the baseline case, and may be developed to make empirical predictions about real resources. In the baseline case the economy passes through a series of phases: initially resource consumption is low; as technology improves, resource consumption rises and real resource price is constant; in the long run there is a transition to a b.g.p. on which resource consumption is constant and resource price tracks the wage.

Keywords: Directed technological change; Natural resources; Hotelling rule. (search for similar items in EconPapers)
JEL-codes: O13 O33 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-05-04
New Economics Papers: this item is included in nep-ene, nep-env, nep-for and nep-res
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Citations: View citations in EconPapers (2)

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