Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-27T22:04:04.007Z Has data issue: false hasContentIssue false
  • English
  • Français

NONRENEWABLE ENERGY RESOURCES AS INPUT FOR PHYSICAL CAPITAL ACCUMULATION: A NEW APPROACH

Published online by Cambridge University Press:  22 February 2010

Agustín Pérez-Barahona
Agustín Pérez-Barahona*
Affiliation:
INRA-AgroParisTech and École Polytechnique
*
Address correspondence to: Agustín Pérez-Barahona, INRA-Économie publique, Avenue Lucien Brétignières, 78850 Thiverval Grignon, France; e-mail: agperez@grignon.inra.fr.
Get access Rights & Permissions [Opens in a new window]

Abstract

In contrast to the standard approach in energy economics, this paper assumes that physical capital accumulation is relatively more energy-intensive than consumption. By means of Gaussian hypergeometric functions, we provide a closed-form representation of the optimal solution paths of our variables in levels, whatever the initial conditions (i.e., global dynamics). We find that, in general, the optimal trajectories are nonmonotonic. P.S. Dasgupta and G.M. Heal [Review of Economic Studies (special number), 3–28 (1974)] pointed out this result (local dynamics) for the optimal consumption in a model with identical technology for both physical capital accumulation and consumption. However, our paper introduces five novelties with respect to their study, namely, global dynamics, the importance of the proportion of nonrenewable energy resources to endowment of physical capital [S(0)/K(0)], the role of technical progress, U-shaped behavior of consumption, and nonmonotonicity of resource extraction.

Keywords

Nonrenewable ResourcesEnergy-Saving Technical ProgressSpecial FunctionsGlobal Dynamics
Type
Articles
Information
Macroeconomic Dynamics , Volume 15 , Issue 1 , February 2011 , pp. 1 - 30
Copyright
Copyright © Cambridge University Press 2010

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Abramowitz, M. and Stegun, A. (1972) Handbook of Mathematical Functions. New York: Dover.Google Scholar
Aghion, P. and Howitt, P. (1992) A model of growth through creative destruction. Econometrica 60 (2), 323–351.CrossRefGoogle Scholar
Andrews, G., Askey, R., and Roy, R. (1999). Special Functions. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Azomahou, T., Boucekkine, R., and Nguyen, Van P. (2006) Energy Consumption and Vintage Effect: A Sectoral Analysis. Mimeo, CORE, Université catholique de Louvain (Belgium).Google Scholar
Barro, R. and Sala-i-Martin, X. (2003) Economic Growth 2nd edition. Cambridge, MA: MIT Press.Google Scholar
Boucekkine, R., Martínez, B., and Ruiz-Tamarit, J. R. (2008) Note on global dynamics and imbalance effects in the Lucas–Uzawa model. International Journal of Economic Theory 4 (4), 503–518.CrossRefGoogle Scholar
Boucekkine, R. and Pommeret, A. (2004) Energy saving technical progress and optimal capital stock: The role of embodiment. Economic Modelling 21, 429–444.Google Scholar
Boucekkine, R. and Ruiz-Tamarit, J.R. (2008) Special functions for the study of economic dynamics: The case of the Lucas–Uzawa model. Journal of Mathematical Economics 44 (1), 34–54.Google Scholar
Buonanno, P., Carraro, C., and Galeotti, M. (2003) Endogenous induced technical change and the costs of Kyoto. Resource and Energy Economics 25 (1), 11–34.CrossRefGoogle Scholar
Carraro, C., Gerlagh, R., and van der Zwaan, B. (2003) Endogenous technical change in environmental macroeconomics. Resource and Energy Economics 25, 1–10.Google Scholar
Cass, D. (1965) Optimum growth in an aggregative model of capital accumulation. Review of Economic Studies 32 (July), 233–240.Google Scholar
COM (2005) Doing More with Less. Green Papers. Official Documents. European Union, 265, June.Google Scholar
Dasgupta, P.S. and Heal, G.M. (1974) The optimal depletion of exhaustible resources. Review of Economic Studies (special number), 3–28.Google Scholar
Dasgupta, P.S. and Heal, G.M. (1979) Economic Theory and Exhaustible Resources. Cambridge, UK: Cambridge University Press.Google Scholar
Eurostat (2008) Eurostat Data. European Commission. Available at http://epp.eurostat.ec.europa.eu/.Google Scholar
Grossman, G.H. and Helpman, E. (1991a) Quality ladders and product cycles. Quarterly Journal of Economics, 106 (425), 557–586.CrossRefGoogle Scholar
Grossman, G.H. and Helpman, E. (1991b) Quality ladders in the theory of growth. Review of Economic Studies 58 (1), 43–61.Google Scholar
Groth, C. and Schou, P. (2007) Growth and non-renewable resources: The different roles of capital and resource taxes. Journal of Environmental Economics and Management 53 (1) (January), 80–98.CrossRefGoogle Scholar
Growiec, J. and Schumacher, I. (2008) On technical change in the elasticities of resource inputs. Resources Policy 33 (4), 210–221.CrossRefGoogle Scholar
Hartwick, J.M. (1989) Non- renewable Resources: Extraction Programs and Markets. London: Harwood Academic.Google Scholar
IEA (2006) World Energy Outlook 2006. Paris: OECD/International Energy Agency.Google Scholar
Jorgenson, D.W. and Wilcoxen, P.J. (1993) Energy, the environment, and economic growth. In Kneese, A.V. and Sweeney, J.L. (eds.), Handbook of Natural Resource and Energy Economics, vol. 3, pp. 1267–1349. Oxford, UK: Elsevier Science Publishers B.V.Google Scholar
Koopmans, T.C. (1965) On the concept of optimal economic growth. In the Econometric Approach to Development Planning. Amsterdam: North Holland.Google Scholar
Krautkraemer, J.A. (1998) Nonrenewable resource scarcity. Journal of Economic Literature 36 (4) (December), 2065–2107.Google Scholar
Kuper, Gerard H. and van Soest, Daan P. (2003). Path-dependency and input substitution: Implications for energy policy modelling. Energy Economics 25 (4)(July), 397–407.CrossRefGoogle Scholar
Luke, L.Y. (1969) The Special Functions and Their Approximations, vols. 1–2. New York: Academic Press.Google Scholar
Newell, R., Jaffe, A., and Stavins, R. (1999) The induced innovation hypothesis and energy-saving technological change. Quarterly Journal of Economics 114, 941–975.Google Scholar
Pérez-Barahona, A. and Zou, B. (2006a) A comparative study of energy saving technical progress in a vintage capital model. Resource and Energy Economics 28 (2), 181–191.CrossRefGoogle Scholar
Pérez-Barahona, A. and Zou, B. (2006b) Energy saving technological progress in a vintage capital model. In de Miguel, C., Labandeira, X., and Manzano, B. (eds.), Economic Modelling of Climate Change and Energy Policies, pp. 166–179. Northampton, MA: Edward Elgar.CrossRefGoogle Scholar
Pezzey, J. and Withagen, C.A. (1998) The rise, fall and sustainability of capital-resource economics. Scandinavian Journal of Economics 100 (2), 513–527.Google Scholar
Ramsey, F. (1928) A mathematical theory of saving. Economic Journal 38 (December), 543–559.Google Scholar
Smulders, S. and de Nooij, Michiel (2003) The impact of energy conservation on technology and economic growth. Resource and Energy Economics 25, 59–79.Google Scholar
Solow, Robert M. (1974a) The economics of resources or the resources of economics. American Economic Review 64 (2), 1–14.Google Scholar
Solow, Robert M. (1974b) Intergenerational equity and exhaustible resource. Review of Economic Studies (special number), 29–46.CrossRefGoogle Scholar
Stiglitz, J. (1974) Growth with exhaustible natural resources: Efficient and optimal growth paths. Review of Economic Studies (special number), 123–137.Google Scholar
Sydsæter, K., Strøm, A., and Berck, P. (2000) Economists' Mathematical Manual. Berlin: Springer-Verlag.Google Scholar
Temme, N.M. (1996) Special Functions. An Introduction to the Classical Functions of Mathematical Physics. New York: Wiley.CrossRefGoogle Scholar