Natural Resources Dynamics: Exhaustible and Renewable Resources, and the Rate of Technical Substitution
Posted: 1 Jun 2011
Date Written: May 30, 2011
In this paper we study both exhaustible and renewable resources in an endogenous growth model. In particular, we consider the hypotheses in which the rate of technical substitution (RTS) between those two inputs is or is not equal to one. Moreover, we depart from a basic theoretical framework to account for the negative externality constituted by waste accumulation. Finally, a comparative analysis is made between Pigouvian tax and waste recycling, as an environmental policy to correct market failure represented by refuse accumulation.
Keywords: economic growth, endogenous technological progress, exhaustible resources, Pigouvian taxes, renewable natural inputs, rate of technical substitution (RTS), waste recycling
JEL Classification: Q32, O11
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