Capital Accumulation and Resource Depletion: A Hartwick Rule Counterfactual

Kirk Hamilton (), Giovanni Ruta and Liaila Tajibaeva ()

Environmental & Resource Economics, 2006, vol. 34, issue 4, pages 517-533

Abstract: How much produced capital would resource-abundant countries have today if they had actually followed the Hartwick Rule (invest resource rents in other assets) over the last 30 years? We employ time series data on investment and rents on exhaustible resource extraction for 70 countries to answer this question. The results are striking: Venezuela, Trinidad and Tobago, and Gabon would all have as much produced capital as South Korea, while Nigeria would have five times its current level. A specific rule for sustainability – maintain positive constant genuine investment – is shown to lead to unbounded consumption. Copyright Springer 2006

Keywords: Hartwick rule; exhaustible resources; sustainable development; Q01; Q32; Q56 (search for similar items in EconPapers)
Date: 2006
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Working Paper: Capital accumulation and resources depletion - a Hartwick rule counterfactual (2005)
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