Non-Renewable Resources and the Possibility of Sustainable Economic Development in a Positive or Negative Population Growth Economy

Sasaki, Hiroaki (2019): Non-Renewable Resources and the Possibility of Sustainable Economic Development in a Positive or Negative Population Growth Economy.

Abstract

The purpose of this study is to investigate how the long-run growth rate of per capita output is determined when an economy is subject to non-renewable resource constraints and the population growth is negative by using a theoretical model. From this, we can examine the effect of population decline and the effect of depletion of natural resources on economic growth. Our results show that irrespective of whether the population growth rate is positive or negative, the long-run growth rate of per capita output can be positive depending on conditions. This result suggests that even an economy with non-renewable resources and declining population can obtain sustainable economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: non-renewable resources; declining population; endogenous growth
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q3 - Nonrenewable Resources and Conservation > Q32 - Exhaustible Resources and Economic Development; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

References

Arrow, K. J. (1962) "The economic implications of learning by doing," Review of Economic Studies 29, pp. 155-171.

Barbier, E. B. (1999) "Endogenous growth and natural resource scarcity," Environmental and Resource Economics 14, pp. 51-74.

Bretschger, L. (2013) "Population growth and natural-resource scarcity: long-run development under seemingly unfavorable conditions," Scandinavian Journal of Economics 115 (3), pp. 722-755.

Cabo, F., Martin-Herran, G., and Martinez-Garcia, M. P. (2016) "A note on the stability of fully endogenous growth with increasing returns and exhaustible resources," Macroeconomic Dynamics 20 (3), pp. 819-831.

Christiaans, T. (2011) "Semi-endogenous growth when population is decreasing," Economics Bulletin 31 (3), pp. 2667-2673.

Christiaans, T. (2017) "On the implications of declining population growth for regional migration," Journal of Economics 122 (2), pp. 155-171.

Dasgupta, P. and Heal, G. (1974) "The optimal depletion of exhaustible resources," Review of Economic Studies 41, pp. 3-28.

Graham, B. S. and Temple, J. R. W. (2006) "Rich nations, poor nations: how much can multiple equilibria explain?" Journal of Economic Growth 11 (5), pp. 5-41.

Groth, C. (2007) "A new-growth perspective on non-renewable resources," in L. Bretschger and S. Smulders (eds.) Sustainable Resource Use and Economic Dynamics, pp. 127-163, Springer.

Groth, C. and Schou, P. (2002) "Can non-renewable resources alleviate the knife-edge character of endogenous growth?" Oxford Economic Papers 54, pp. 386-411.

Jones, C. I. (1995) "R&D-based models of economic growth," Journal of Political Economy 103, pp. 759-784.

Jones, C. I. (1999) "Growth: with or without scale effects?" American Economic Review 89, pp. 139-144.

Jones, C. I. and Vollath, D. (2013) Introduction to Economic Growth, 3rd edition, W.W. Norton \& Company.

Malaczewski, M. (2018) "Natural resources as an energy source in a simple economic growth model," Bulletin of Economic Research 70 (4), pp. 362-380.

Ritschl, A. (1985) "On the stability of the steady state when population is decreasing," Journal of Economics 45 (2), pp. 161-170.

Sasaki, H. (2015) "International trade and industrialization with negative population growth," Macroeconomic Dynamics 19 (8), pp. 1647-1658.

Sasaki, H. and Hoshida, K. (2017) "The effects of negative population growth: an analysis using a semi-endogenous R\&D growth model," Macroeconomic Dynamics 21 (7), pp. 1545-1560.

Solow, R. M. (1956) "A contribution to the theory of economic growth," Quarterly Journal of Economics 70, pp. 65-94.

Solow, R. M. (1974) "Intergenerational equity and exhaustible resources," Review of Economic Studies 41, pp. 29-45.

Statistics Japan (2018) World Statistics, Japan Statistics Association, Tokyo (in Japanese).

Stiglitz, J. (1974) "Growth with exhaustible natural resources: efficient and optimal growth paths," Review of Economic Studies 41, pp. 123-137.

Suzuki, H. (1976) "On the possibility of steadily growing per capita consumption in an economy with a wasting and non-replenishable resource," Review of Economic Studies 43, pp. 527-535.