The opportunity cost of natural resource extraction in developing countries: A general equilibrium analysis

Thesis/Dissertation · Tue Jan 01 04:00:00 EST 1991

OSTI ID:7167615

Malyshev, T C

The primary goal of this thesis is to develop a dynamic general equilibrium model of natural resource extraction and depletion. The model is used to study the effects of natural resource extraction on the welfare-maximizing development path for a resource-exporting country. Both the consumption and the production of the resource commodity are linked to other sectors of the economy. Thus, the marginal opportunity cost of natural resource extraction is endogenously determined and is distinct from the world price of the final resource commodity. In the simulation exercises, a nonlinear root-finding procedure is used to determine the sensitivity of the optimal rate of extraction and savings to changes in the quantity of natural resource reserves. It is demonstrated that, with endogenous terminal debt accumulation, a resource boom may lead a contraction in both the traditional tradable and nontradable sectors in the economy with no effect on the real exchange rate. In addition to these simulation results, the general equilibrium model is used to study the optimal taxation of environmental externalities in the resource sector.

• Research Organization: Duke Univ., Durham, NC (United States)
• OSTI ID: 7167615
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
290400* -- Energy Planning & Policy-- Energy Resources
DEVELOPING COUNTRIES
ECONOMIC IMPACT
ENVIRONMENTAL POLICY
GOVERNMENT POLICIES
MATHEMATICAL MODELS
OPTIMIZATION
RESOURCE DEPLETION
RESOURCE DEVELOPMENT
TAXES