Title: Non-renewable resources, endogenous technical change and sustainable growth

Authors: Jurgen Antony

Addresses: CPB Netherlands Bureau for Economic Policy Analysis, Van Stolkweg 14, The Hague 2585 JR, The Netherlands; Department of Economics, University of Augsburg, Universitatsstrasse 16, Augsburg 86159, Germany

Abstract: Non-renewable resources are problematic for sustainable positive growth if they are essential for production, households solve an intertemporal Ramsey problem and population is growing. Second generation growth models predict that growth is positively related to growth in production factors. A growing population seems, therefore, beneficial for growth while the need for a steadily declining usage of the non-renewable resource due to sustainability seems not to be so. To elaborate on this issue, this paper develops a semi-endogenous growth model with two intermediate goods, one produced from labour and one from the non-renewable resource. The technology for producing these goods is partially endogenous and determined separately for both goods. The two intermediate goods are used to produce final output of the economy. Using this setup, this paper derives conditions for stable sustainable positive long-run growth in per capita production and consumption.

Keywords: non-renewable resources; semi-endogenous growth; sustainability; sustainable growth; sustainable development; sustainable economy; growth modelling; per capita production; per capita consumption; technological change.

DOI: 10.1504/IJSE.2010.035485

International Journal of Sustainable Economy, 2010 Vol.2 No.4, pp.365 - 381

Published online: 30 Sep 2010 *

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