OPTIMAL REGULATION AND GROWTH IN A NATURAL-RESOURCE-BASED ECONOMY

José Ramón Ruiz Tamarit and Manuel Sánchez Moreno
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José Ramón Ruiz Tamarit: Universitat de València
Manuel Sánchez Moreno: Universitat de València
Authors registered in the RePEc Author Service: José Ramón Ruiz-Tamarit

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: This paper develops a two-sector model for a renewable natural resource based economy. Pareto efficient results show the optimal harvesting rate that allows for sustained long-run optimal growth, which is upper-bounded by the biological rate of reproduction. Regulation prevents from resource over-exploitation and exhaustion which arise under open access. The Ramsey policy allowing the competitive economy to reach the first-best solution, leads the government to tax harvesting activity from firms and distribute the receipts among households. In the short-run the tax is variable. In the long-run, the lower the intrinsic rate of reproduction the higher the constant unit tax on the resource use.

Keywords: Natural Resources; Efficiency; Open Access; Ramsey Regulation; Growth. (search for similar items in EconPapers)
JEL-codes: C62 D90 H2 O41 Q2 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-11
New Economics Papers: this item is included in nep-dev, nep-env, nep-mic, nep-pbe and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:2006-21

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