Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171494
Authors: 
Di Maria, Corrado
Valente, Simone
Year of Publication: 
2006
Series/Report no.: 
Economics Working Paper Series 06/50
Abstract: 
We analyze a multi-sector growth model with directed technical change where man-made capital and exhaustible resources are essen- tial for production. The relative profitability of factor-specific inno- vations endogenously determines whether technical progress will be capital- or resource-augmenting. We show that convergence to bal- anced growth implies zero capital-augmenting innovations: in the long run, the economy exhibits purely resource-augmenting technical change. This result provides sound microfoundations for the broad class of models of exogenous/endogenous growth where resource-aug- menting progress is required to sustain consumption in the long run, contradicting the view that these models are conceptually biased in favor of sustainability.
Subjects: 
Endogenous Growth
Directed Technical Change
Exhaustible Resources
Sustainability
JEL: 
O31
O33
O41
Q32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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