Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171473
Authors: 
Bretschger, Lucas
Year of Publication: 
2005
Series/Report no.: 
Economics Working Paper Series 03/29
Abstract: 
Using a dynamic model with non-renewable natural resources and endogenous knowledge creation, the paper analyses economic development under conditions which are generally considered as most unfavourable. We assume poor substitution between primary input factors, positive population growth and a limited supply of materials in the static part of the framework, as well as natural resources being an essential input into R&D, and constant or decreasing returns to innovative activities in the dynamic part. It is shown that there is an inverse relationship between input substitution and growth-enhancing sectoral change and that labour supply supports economic dynamics through the knowledge-creation effect. A permanent increase in living standards is achievable under free market conditions, but adjustment costs and errors in long-term expectations might impede this development.
Subjects: 
endogenous technological change
environment
natural resources
sustainability
JEL: 
Q20
Q30
O41
O33
Document Type: 
Working Paper

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