Di Maria, Corrado
- Working Paper
Rights / licenseIn Copyright - Non-Commercial Use Permitted
We analyze a multi-sector growth model with directed technical change where man-made capital and exhaustible resources are essential for production. The relative pro tability of factor-specific innovations endogenously determines whether technical progress will be capital- or resource-augmenting. We show that convergence to balanced 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-augmenting progress is required to sustain consumption in the long run, contradicting the view that these models are conceptually biased in favor of sustainability Show more
External linksSearch via SFX
Journal / seriesEconomics Working Paper Series
PublisherETH, Eidgenössische Technische Hochschule Zürich, WIF, Institute of Economic Research
SubjectEndogenous Growth; Sustainability; Exhaustible Resources; Directed Technical Change
Organisational unit03635 - Bretschger, Lucas / Bretschger, Lucas
02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.
NotesFirst version January 30, 2006, This version March 7, 2006.
MoreShow all metadata