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NATURAL RESOURCES AS AN ENERGY SOURCE IN A SIMPLE ECONOMIC GROWTH MODEL
Author(s) -
Malaczewski Maciej
Publication year - 2018
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/boer.12153
Subject(s) - counterfactual thinking , economics , complementarity (molecular biology) , simple (philosophy) , natural resource , production (economics) , growth model , capital (architecture) , energy (signal processing) , microeconomics , econometrics , mathematics , history , ecology , philosophy , genetics , archaeology , epistemology , biology , statistics
Some empirical studies show that natural resources and physical capital are likely to be complements in the production process rather than substitutes. What is more, the assumption of substitutability in many theoretical papers leads to some counterfactual conclusions. This paper proposes a simple model of economic growth with complementarity between these two factors of production via energy production. We consider the equilibrium state of this model and derive the conditions necessary to maintain balanced growth of all macroeconomic variables. We also analyze the time to depletion of natural resources when these resources are the main energy source.