Nota di Lavoro, Fondazione Eni Enrico Mattei 2. 2000
The purpose of this paper is to show that in a general equilibrium framework it is never optimal to use high cost substitute after lower cost exhaustible resource even if it is possible to accumulate productive capital. Indeed if the high cost substitute is scarce it is always optimal to consume it simultaneously with a lower cost stock. Moreover it may be optimal to consume the high cost substitute before using a lower cost resource.
Natural resources substitute productive capital general equilibrium