A New-Growth Perspective on Non-Renewable Resources

Abstract

Key words: Endogenous growth, innovation, non-renewable resources, knife-edge conditions, robustness, limits to growth. The aim of this article is to review issues related to the incorporation of scarce natural resources in the theory of economic growth and development. More specifically, we shall concentrate on the role of non-renewable resources. A nonrenewable resource is a natural resource the amount of which on earth is finite and which has no natural regeneration process (at least not within a relevant time scale). Hence, the stock of a non-renewable resource is depletable. Fossil fuels as well as many non-energy minerals are examples. A renewable resource is also available only in limited supply, but its stock is replenished by a natural regeneration process. Hence, if the stock of a renewable resource is not over-exploited, it can be sustained in a more or less constant amount. Fertile soil, fish in the sea, and environmental qualities (clean air etc.) would be examples. In this article the focus is on the specific features of non-renewable resources in relation to the feasibility of sustained economic growth.