The Hartwick rule and the characterization of constant consumption paths in the presence of an exhaustible resource

Vincent Martinet

No 2005-06, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: This paper deals with the interpretation of the Hartwick rule in the particular Dasgupta-Heal-Solow model with one capital good and one non-renewable resource. It is argued that the rule is more a descriptive property of constant consumption paths than a sustainability indicator. It is shown that investing the rents from the resource use into man-made capital is a necessary condition for an efficient resource depletion but it is not a sufficient condition for sustainability. A sustainable consumption indicator is described to characterize the sustainability of constant consumption paths.

Keywords: Hartwick rule; non-renewable resources; sustainable consumption. (search for similar items in EconPapers)
JEL-codes: D99 Q01 Q30 (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2005-06

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