EconPapers    
Economics at your fingertips  
 

THE OPTIMAL DEPLETION OF EXHAUSTIBLE RESOURCES: A COMPLETE CHARACTERIZATION

Hassan Benchekroun () and Cees Withagen

Departmental Working Papers from McGill University, Department of Economics

Abstract: We provide the closed form solution to the Dasgupta-Heal-Solow-Stiglitz (DHSS) model. The DHSS model is based on the seminal articles Dasgupta and Heal (Rev. Econ. Stud., 1974), Solow (Rev. Econ. Stud., 1974) and Stiglitz (Rev. Econ. Stud., 1974) and describes an economy with two assets, man-made capital and a nonrenewable resource stock. We explicitly characterize, for such an economy, the dynamics along the optimal trajectory of all the variables in the model and from all possible initial values of the stocks. We use the analytical solution to prove several properties of the optimal consumption path. In particular, we show that the initial consumption under a utilitarian criterion starts below the maximin rate of consumption if and only the resource is abundant enough and that under a utilitarian criterion, it is not necessarily the present generation that benefits most from a windfall of resources.

JEL-codes: E20 Q30 C65 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env and nep-mac
Date: 2010-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.mcgill.ca/files/economics/Benchekroun_Withagen.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.mcgill.ca/files/economics/Benchekroun_Withagen.pdf [301 Moved Permanently]--> https://www.mcgill.ca/files/economics/Benchekroun_Withagen.pdf)

Related works:
Journal Article: The optimal depletion of exhaustible resources: A complete characterization (2011) Downloads
Working Paper: The Optimal Depletion of Exhaustible Resources: A Complete Characterization (2010) Downloads
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:mcl:mclwop:2010-01

Access Statistics for this paper

More papers in Departmental Working Papers from McGill University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Shama Rangwala (). This e-mail address is bad, please contact .

 
Page updated 2019-07-22
Handle: RePEc:mcl:mclwop:2010-01