 Can non-renewable resources alleviate the knife-edge character of endogenous growth?Christian Groth () and Poul Schou Oxford Economic Papers, 2002, vol. 54, issue 3, 386-411 Abstract: Standard endogenous growth models rely on the arbitrary assumption that the technology has exactly constant returns with respect to producible inputs. Can this knifeedge restriction be relaxed by including non-renewable resources as necessary inputs in production? In a one-sector optimal growth model, we find that the strain on the economy imposed by the need to extract successively smaller amounts of the nonrenewable resource can offset the potentially explosive effects of allowing for increasing returns to producible inputs. However, growth in per capita consumption will be unstable unless there is population growth. Thus, the knife-edge problem of (strictly) endogenous growth reappears as an instability problem. But a 'semi-endogenous' growth framework turns out to be an attractive alternative, relying on less restrictive parameter values, maintaining stability, and allowing a rich set of determinants of longrun growth. Copyright 2002, Oxford University Press. Date: 2002 There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:oup:oxecpp:v:54:y:2002:i:3:p:386-411 Ordering information: This journal article can be ordered from Access Statistics for this article Oxford Economic Papers is currently edited by James Forder and Francis J. Teal More articles in Oxford Economic Papers from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. |
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