The Optimal Use of Exhaustible Resources Under Non-constant Returns to Scale

Aseev S, Besov K, & Kaniovski S (2016). The Optimal Use of Exhaustible Resources Under Non-constant Returns to Scale. Österreichisches Institut für Wirtschaftsforschung , Vienna, Austria.

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Abstract

The paper offers a complete analysis of the welfare-maximising capital investment and resource depletion policies in the Dasgupta-Heal-Solow-Stiglitz (DHSS) model with capital depreciation and any returns to scale. We establish a general existence result and show that an optimal admissible policy may not exist if the output elasticity of the resource equals 1. We characterise the optimal policies by applying an appropriate version of the Pontryagin maximum principle for infinite-horizon optimal control problems. We conclude the paper with an economic interpretation and a discussion of the welfaremaximising
policies.

Item Type: Other
Uncontrolled Keywords: optimal growth, nonconstant returns to scale, exhaustible resources
Research Programs: Advanced Systems Analysis (ASA)
Bibliographic Reference: WIFO Working Papers, No. 525
Depositing User: Romeo Molina
Date Deposited: 13 Oct 2016 13:48
Last Modified: 24 Oct 2016 09:44
URI: http://pure.iiasa.ac.at/13877

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