Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/171471 
Year of Publication: 
2004
Series/Report no.: 
Economics Working Paper Series No. 03/27
Version Description: 
June 2004
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
The paper aims to substantiate the importance of endogenous innovations when evaluating the compatibility of natural resource use and economic development. It explains that technological change has the potential to compensate for natural resource scarcity, diminishing returns to capital, poor input substitution, and material balance restrictions, but is limited by various restrictions like fading returns to innovative investments and rising research costs. It also shows how innovative activities are fostered by accurate price signals and research-favouring sectoral change. The simultaneous effects of increasing technical knowledge, decreasing resource inputs, and increasing world population largely determine the chances of long-run sustainable development. Consequently, future research has to be directed at a more thorough understanding of the mechanisms driving innovations in the presence of natural resource scarcity.
Subjects: 
endogenous technological change
environment
natural resources
sustainability
JEL: 
Q20
Q30
O41
O33
Document Type: 
Working Paper

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