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Modeling the role of natural resources in the economy: an extended materials-balance approach

Thesis/Dissertation ·
OSTI ID:6427015
During the past few decades, economists have tried to incorporate physical and natural laws, particularly the First and Second Laws of Thermodynamics, into models of economic processes. Labeling this an extended materials-balance approach, this dissertation outlines some of its development and relations with resource economics. The implications of these two laws for resource availability and economic activity are used to explore a controversial issue in economics - the sufficiency of natural resources for economic growth. Models of the processes of production and growth consistent with an extended materials-balance approach are developed to analyze the optimal use of natural resources and the limits to growth which they may impose. Standard neoclassical analysis of the growth potential of an economy emphasizes the possibility of overcoming constraints imposed by the exhaustibility of resources. This is often proven with reference to a Cobb-Douglas production technology. To further contrast the nature of models using Cobb-Douglas versus materials-balance Cobb-Douglas production specifications, models of optimal control of consumption and resource depletion over time are analyzed and simulated.
Research Organization:
Clark Univ., Worcester, MA (USA)
OSTI ID:
6427015
Country of Publication:
United States
Language:
English