We study long-run growth in a multi-sector economy with non-renewable resource use and endogenous innovations. Unlike recent capital resource models, we find that poor input substitution need not be detrimental for sustainable growth; on the contrary, combined with resource depletion it fosters...

Much of the improvement in living standards in developed and developing countries is attributable to the exploitation of nonrenewable and renewable resources. The problem is to know when the exploitation occurs at rates and with technologies that are sustainable. If the technologies used are not...

In the real options approach to capital budgeting, plans that allow for flexibility in the design or timing of an investment or economic action are valuable. Real options naturally arise in decisions to develop, extract, or harvest natural resources. We (a) review the existing literature in the...

The debate over the curse of natural resources has haunted developing countries for decades if not centuries. A review of existing empirical evidence suggests that the curse remains elusive. The fragile negative effect of natural resources on economic growth might be due to international...

This paper constructs a two-sector unified growth model. Learning-by-doing in agriculture eventually allows the preindustrial economy to leave its Malthusian trap. But entrepreneurs in the manufacturing sector do not attempt invention if not much is known about natural phenomena. This delays the...

This paper constructs a two-sector unified growth model. Learning-by-doing in agriculture eventually allows the preindustrial economy to leave its Malthusian trap. But entrepreneurs in the manufacturing sector do not attempt invention if not much is known about natural phenomena. This delays the...

This paper builds a two-country (North, South), two-sector (polluting, nonpolluting) trade model with directed technical change, examining whether unilateral environmental policies can ensure sustainable growth. The polluting good is produced with a clean and a dirty input. I show that a...

Summary Based on the observation that energy costs have been decreasing over much of the 20th century, this paper extends the Romer (1990) model of endogenous technological change to examine the impact of secular changes in energy costs on technological progress and long-run growth. The key...