Scandinavian Working Papers in Economics

Working Paper Series,
Swedish University of Agricultural Sciences, Department Economics

No 2012:01: The economics of natural resources: Understanding and predicting the evolution of supply and demand

Rob Hart ()
Additional contact information
Rob Hart: Department of Economics, Swedish University of Agricultural Sciences, Postal: Department of Economics, Box 7013, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden

Abstract: We develop a dynamic model of prices and quantities of non-renewable resources, carefully justifying our assumptions. Resource stocks are inhomogeneous, and there is endogenous directed technological change both in extraction and final-good production. The model explains stylized facts while simultaneously providing a framework for prediction; it yields analytical results in the baseline case, and may be developed to make empirical predictions about real resources. In the baseline case the economy passes through a series of phases: initially resource consumption is low; as technology improves, resource consumption rises and real resource price is constant; in the long run there is a transition to a b.g.p. on which resource consumption is constant and resource price tracks the wage.

Keywords: Directed technological change; Natural resources; Hotelling rule.

JEL-codes: O13; O33

26 pages, May 4, 2012

Full text files


Download statistics

Questions (including download problems) about the papers in this series should be directed to Elizabeth Hillerius ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2018-01-23 23:37:57.