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Title:Complementarity, impatience, and the resilience of natural-dependent economies PDF Logo
Authors:Quaas, Martin F.
van Soest, Daan
Baumgärtner, Stefan
Issue Date:2011
Series/Report no.:University of Lüneburg Working Paper Series in Economics 220
Abstract:We study how human preferences affect the resilience of economies that depend on more than one type of natural resources. In particular, we analyze whether the degree of substitutability of natural resources in consumer needs may give rise to multiple steady states and path dependence even when resources are managed optimally. This is a major shift in the interpretation and analysis of resilience, from viewing (limited) resilience as an objective property of the economy-environment system to acknowledging its partially subjective, preference-based character. We find that society tends to be less willing to buffer exogenous shocks if resource goods are complements in consumption than if they are substitutes. Hence, the stronger the complementarity between the various types of resource goods, the less resilient the economy is.
Subjects:resilience
substitutes and complements
discounting
multiple steady states
natural resources
path dependence
regime shifts
tipping points
JEL:C62
O13
Q01
Q20
Document Type:Working Paper
Appears in Collections:Working Paper Series in Economics, Leuphana Universität Lüneburg

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