Does Productive Capital Affect the Order of Resource Exploitation
Pascal Favard ()
Cahiers du LASER (LASER Working Papers) from LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1
The purpose of this paper is to show that in a general equilibrium framework it is not always optimal to exploit resources in strict sequence, beginning with the lowest cost deposit, even if it is possible to accumulate productive capital. Indeed if there is an exogenous upper bound on the flow of the substitute, it is always optimal to consume it simultaneously with a lower cost stock. Moreover, it may be optimal to consume the high-cost substitute before using a lower cost resource. Classification-JEL: Q3
Keywords: NATURAL RESOURCES; SUBSTITUTE; PRODUCTIVE CAPITAL; GENERAL EQUILIBRIUM (search for similar items in EconPapers)
Pages: 8 pages
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Journal Article: Does productive capital affect the order of resource exploitation? (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:mop:lasrwp:2001.01
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