Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/127213
Authors: 
Baumgärtner, Stefan
Year of Publication: 
2003
Series/Report no.: 
Discussion Paper Series, University of Heidelberg, Department of Economics 396
Abstract: 
It is shown that the thermodynamic law of conservation of mass, the so-called Materials-Balance-Principle, implies that the marginal product as well as the average product of a material resource input are bounded from above. This means that the Inada conditions, one of the standard assumptions of economic growth theory, when applied to material resource inputs are inconsistent with a basic law of nature. The analysis is based on a model of multi-level production where intermediate goods are produced from elementary resources, and an all-purpose final commodity is produced from these intermediates.
Subjects: 
conservation of mass
Inada conditions
materials balance principle
natural resources
production function
thermodynamics
JEL: 
E13
O40
Q30
Document Type: 
Working Paper

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