Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate

Christian Groth ()

No 03-20, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: Conventional endogenous growth theory relies on the assumption of constant returns to ”broad capital”. As Solow pointed out, the strength of this assumption is revealed by recognizing that even the slightest touch of increasing returns creates explosive growth: infinite output in finite time! But Solow’s observation ignored natural resources. What happens if non-renewable resources enter the ”growth engine”? In this case (strictly) endogenous growth requires the technology to be such that there is no upper bound on the sustainable per capita growth rate.

Keywords: endogenous growth; semi-endogenous growth; non-renewable resources; knife-edge (search for similar items in EconPapers)
JEL-codes: O4 Q3 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2003-07
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (3)

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Journal Article: Strictly Endogenous Growth with Non-renewable Resources Implies an Unbounded Growth Rate (2004)
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