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Natural Resources and Economic Growth: Some Theory and Evidence

Author

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  • Dustin Chambers

    (Department of Economics and Finance, Salisbury University)

  • Jang-Ting Guo

    (Department of Economics, 4123 Sproul Hall, University of California)

Abstract

We develop a one-sector endogenous growth model in which renewable natural resources are both a factor of production and measure of environmental quality. Along the balanced growth path, sustained economic growth and a non-deteriorating environment are shown to coexist. Moreover, steady-state economic growth and natural-resource utilization are positively related. Empirically, a cross-country growth regression that includes a broad measure of productive natural resources ¡ª the Ecological Footprint ¡ª provides strong support. Our estimation results also suggest conservation costs are minimal, and growth strategies based on greater physical capital formation and trade openness outperform those relying on more intensive utilization of the environment.

Suggested Citation

  • Dustin Chambers & Jang-Ting Guo, 2009. "Natural Resources and Economic Growth: Some Theory and Evidence," Annals of Economics and Finance, Society for AEF, vol. 10(2), pages 367-389, November.
    • Handle: RePEc:cuf:journl:y:2009:v:10:i:2:p:367-389
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    3. Ndzembanteh Aboubakary Nulambeh & Kadir Yasin Eryiğit, 2022. "Exploring the energy-environment growth nexus in francophone Africa in presence of institutions," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(8), pages 10069-10087, August.
    4. Wang, Chan, 2012. "A very preliminary survey on growth and development," MPRA Paper 39037, University Library of Munich, Germany.
    5. Tony Addison & Amadou Boly & Anthony Mveyange, 2016. "Mining and economic development: Did China's WTO accession affect African local economic development?," WIDER Working Paper Series wp-2016-141, World Institute for Development Economic Research (UNU-WIDER).
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    8. Nasiru Inuwa & Sagir Adamu & Mohammed Bello Sani & Abubakar Muhammad Saidu, 2022. "Resource Curse Hypothesis in GCC Member Countries: Evidence from Seemingly Unrelated Regression," Biophysical Economics and Resource Quality, Springer, vol. 7(4), pages 1-10, December.
    9. Frey, Daniel & Frey, Miriam & Wieslhuber, Carmen, 2013. "Do natural resources define convergence clubs? Empirical evidence from the Kazakh regions," Economic Systems, Elsevier, vol. 37(3), pages 404-414.
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    More about this item

    Keywords

    Natural resources; Endogenous growth; Ecological footprint;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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