IDEAS home Printed from https://ideas.repec.org/a/cje/issued/v50y2017i1p233-272.html
   My bibliography  Save this article

Endogenous growth with a limited fossil fuel extraction capacity

Author

Listed:
  • Gilbert Kollenbach

Abstract

Campbell (1980) and following authors have discussed a limited resource extraction capacity as an augmentation of the well-known Hotelling model. We integrate a limited extraction capacity and related investments in the endogenous growth model of Tsur and Zemel (2005) to study its effect on economic development. The capacity constraint gives rise to three effects. On the one hand, higher energy costs and the reallocation of production towards capacity investments decrease production available for consumption, research and/or capital investments (energy costs and reallocation effect). On the other hand, research investments may increase, which boosts available production (research effect). Depending on the capital endowment and the strength of the effects, long-run consumption may be boosted or depressed. In particular, the capacity constraint may render everlasting consumption growth non-optimal in a resource-rich economy. Furthermore, we find that capacity investments may be postponed to later points in time if the capital endowment is high.

Suggested Citation

  • Gilbert Kollenbach, 2017. "Endogenous growth with a limited fossil fuel extraction capacity," Canadian Journal of Economics, Canadian Economics Association, vol. 50(1), pages 233-272, February.
    • Handle: RePEc:cje:issued:v:50:y:2017:i:1:p:233-272
    DOI: 10.1111/caje.12256
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/caje.12256
    Download Restriction: access restricted to subscribers
    File URL: https://libkey.io/10.1111/caje.12256?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stijepic, Denis, 2017. "On the system-theoretical foundations of non-economic parameter constancy assumptions in economic growth modeling," MPRA Paper 82699, University Library of Munich, Germany.
    2. Kollenbach, Gilbert, 2017. "On the optimal accumulation of renewable energy generation capacity," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 157-179.
    3. Aner Martinez-Soto & Alejandra Calabi-Floody & Gonzalo Valdes-Vidal & Andrea Hucke & Camila Martinez-Toledo, 2023. "Life Cycle Assessment of Natural Zeolite-Based Warm Mix Asphalt and Reclaimed Asphalt Pavement," Sustainability, MDPI, vol. 15(2), pages 1-12, January.
    4. Gilbert Kollenbach, 2022. "International Environmental Agreements and Black Technology," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 601-624, July.
    5. Achim Hagen & Gilbert Kollenbach, 2024. "The Political Economy of Stranded Assets: Climate Policies, Investments and the Role of Elections," Berlin School of Economics Discussion Papers 0033, Berlin School of Economics.
    6. Gilbert Kollenbach, 2019. "Unilateral climate policy and the green paradox: Extraction costs matter," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 52(3), pages 1036-1083, August.

    More about this item

    JEL classification:

    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:50:y:2017:i:1:p:233-272. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Prof. Werner Antweiler (email available below). General contact details of provider: https://edirc.repec.org/data/ceaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.