IDEAS home Printed from https://ideas.repec.org/a/cup/macdyn/v20y2016i03p819-831_00.html
   My bibliography  Save this article

A Note On The Stability Of Fully Endogenous Growth With Increasing Returns And Exhaustible Resources

Author

Listed:
  • Cabo, Francisco
  • Martín-Herrán, Guiomar
  • Martínez-García, María Pilar

Abstract

We analyze a general R&D-based endogenous growth model with a growth-essential natural resource. The economy comprises two separate sectors, final output and R&D, both directly or indirectly dependent on the natural resource. Because the resource is exhaustible and it is an essential productive input, increasing returns to scale to manmade inputs are compatible with nonexplosive sustained growth. The instability problem usually associated with increasing returns is overcome thanks to the existence of imperfect markets in a decentralized economy. We find an admissible range of values for the elasticity of capital in the R&D sector under which growth is fully endogenous and saddlepath stable, with no need of exogenous population growth.

Suggested Citation

  • Cabo, Francisco & Martín-Herrán, Guiomar & Martínez-García, María Pilar, 2016. "A Note On The Stability Of Fully Endogenous Growth With Increasing Returns And Exhaustible Resources," Macroeconomic Dynamics, Cambridge University Press, vol. 20(3), pages 819-831, April.
    • Handle: RePEc:cup:macdyn:v:20:y:2016:i:03:p:819-831_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1365100514000467/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

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


    Cited by:

    1. Hiroaki Sasaki, 2021. "Non‐renewable resources and the possibility of sustainable economic development in an economy with positive or negative population growth," Bulletin of Economic Research, Wiley Blackwell, vol. 73(4), pages 704-720, October.
    2. Sasaki, Hiroaki & Mino, Kazuo, 2024. "Effects of exhaustible resources and declining population on economic growth with Hotelling’s rule," International Review of Economics & Finance, Elsevier, vol. 94(C).
    3. Sasaki, Hiroaki, 2019. "Non-Renewable Resources and the Possibility of Sustainable Economic Development in a Positive or Negative Population Growth Economy," MPRA Paper 92204, University Library of Munich, Germany.
    4. Mino, Kazuo & Sasaki, Hiroaki, 2023. "Long-run consequences of population decline in an economy with exhaustible resources," Economic Modelling, Elsevier, vol. 121(C).
    5. Kazuo Mino & Hiroaki Sasaki, 2021. "Long-Run Consequences of Population Decline in an Economy with Exhaustible Natural Resources," KIER Working Papers 1062, Kyoto University, Institute of Economic Research.

    More about this item

    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:cup:macdyn:v:20:y:2016:i:03:p:819-831_00. 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: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/mdy .

    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.