The problem of optimal endogenous growth with exhaustible resources revisited

Aseev, S.M., Besov, K.O., & Kaniovski, S. (2013). The problem of optimal endogenous growth with exhaustible resources revisited. In: Green Growth and Sustainable Development. Eds. Cuaresma, J Crespo, Palokangas, T, & Tarasyev, A, pp. 3-30 Berlin/Heidelberg: Springer. 10.1007/978-3-642-34354-4_1.

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We study optimal research and extraction policies in an endogenous growth model in which both production and research require an exhaustible resource. It is shown that optimal growth is not sustainable if the accumulation of knowledge depends on the resource as an input, or if the returns to scale in research are decreasing, or the economy is too small. The model is stated as an infinite-horizon optimal control problem with an integral constraint on the control variables. We consider the main mathematical aspects of the problem, establish an existence theorem and derive an appropriate version of the Pontryagin maximum principle. A complete characterization of the optimal transitional dynamics is given.

Item Type: Book Section
Research Programs: Advanced Systems Analysis (ASA)
Bibliographic Reference: In: J Crespo Cuaresma, T Palokangas, A Tarasyev (Eds); Green Growth and Sustainable Development; Springer Berlin Heidelberg pp.3-30
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Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:49
Last Modified: 27 Aug 2021 17:39

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