Investigating the Relationship between Natural Capital and Sustainable Economic Growth using the General Equilibrium Model

Fatemeh Salimianrad (), Vali Borimnejad () and Sahar Dehyuori ()
Additional contact information
Fatemeh Salimianrad: PhD student in Agricultural Economics, Natural Resources, Karaj Branch, Islamic Azad University, Karaj, Iran.
Vali Borimnejad: Department of Agricultural Economics, Karaj Branch, Islamic Azad University, Karaj, Iran.
Sahar Dehyuori: Department of Agricultural Extension and Education, Environmental Scinece Research Center, Islamshahr Branch, Islamic Azad University, Islamshahr, Iran.

Journal for Economic Forecasting, 2021, issue 3, 120-139

Abstract: Countries with natural resources are always more affluent in terms of natural resources than other countries. The essential and primary point in these countries is the manner and extent of positive exploitation of these resources. These countries are striving to achieve a high level of economic growth and prosperity. How and how much positive use of these resources is used to achieve this goal is very important. In these countries, public investment is used as a driving force for long-term growth. In the present study, we investigated the impact of public investment policies on macroeconomic variables using a general equilibrium model. The results show that, during the time, if institute and management exercises improve, public investment as an efficient capacity reduces the need for constraints. Also, if better selected, organized, and implemented investment projects, the average real return on investment will increase and, as a result, without increasing the level of debt, will have a positive effect on stock growth and income. In other words, choosing the right project will increase investment efficiency, and as a result, capital growth and macroeconomic stability will be ahead. To better examine and ensure the accuracy of the results, we look at the variables of public debt and commercial debt with further and long-term reductions in prices. Due to the decrease in the price of total public debt, foreign trade debt has increased by more than what was mentioned in the previous case. This finding confirms the economic reasoning at the efficiency level: "Public investment in low-income countries turns half of the cost of public investment into effective public investment." The initial level is in motion, and only with the policy of financial integration can the amount of capital be increased to some extent in the forecast horizon. The research findings generally emphasize prudent fiscal policies to reform infrastructure investment and increase productivity rather than a sudden increase in public investment. Long-term economic growth is also possible through increased productivity and financial stability.

Keywords: economic growth; sustainability; structural model; Dutch disease (search for similar items in EconPapers)
JEL-codes: A12 B22 B41 C15 C53 C63 C82 E61 G38 O11 Q01 Q56 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ipe.ro/rjef/rjef3_21/rjef3_2021p120-139.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2021:i:3:p:120-139

Access Statistics for this article

Journal for Economic Forecasting is currently edited by Lucian Liviu Albu and Corina Saman

More articles in Journal for Economic Forecasting from Institute for Economic Forecasting Contact information at EDIRC.
Bibliographic data for series maintained by Corina Saman ( this e-mail address is bad, please contact ).