Natural resource scarcity and technological change

Nonrenewable natural resources, such as aluminum and crude oil, exist only in fixed amounts on Earth. Consequently, some observers are concerned that natural resource scarcity will eventually limit future economic growth and human well-being. Others remain optimistic that technological change will overcome geophysical scarcity. Brown and Wolk examine the evidence for natural resource scarcity and find that over the past century reliance on free markets has promoted sufficient technological change to overcome geophysical scarcity for most nonrenewable natural resources. Rather than rising--as would result from increased scarcity--the relevant real prices of most nonrenewable natural resources have fallen. Although declines in real prices have moderated since World War II, the authors find little evidence of increased scarcity in the postwar era. Increased reliance on markets during the closing decades of the twentieth century is cause for optimism that these trends will continue in the twenty-first.