Research and development and sustainable growth over alternative types of natural resources

Journal article: This paper develops an endogenous growth model to study how different types of natural resources – namely renewable versus non-renewable – affect sustainable growth and welfare. In a decentralized equilibrium setting, we find that negative growth may occur in an economy endowed with non-renewable resources. To escape from this stagnant growth, the research sector must be highly productive. However, non-renewable resources are not necessarily dominated by their renewable counterparts in terms of resulting output growth and welfare. We also characterize analytically and quantitatively equilibrium paths to evaluate growth and welfare implications resulting from a resource type switch that is caused by an adverse environmental shock.

Author(s)

Thanh Le, Cuong Le Van

Journal
  • Economic Modelling
Date of publication
  • 2018
Keywords JEL
O13 O31 O41
Keywords
  • Non-renewable resources
  • Renewable resources
  • R&D-based growth
  • Stagnant growth
  • Vertical innovation
Pages
  • 215-229
Version
  • 1
Volume
  • 70