Technological Change in Resource Extraction and Endogenous Growth

• DOI: 10.2139/ssrn.2364046
• Publication Date: 2013-12-11T16:04:14Z
• Authors: Martin Stuermer; Gregor Schwerhoff
• Keywords: Endogenous growth theory

We add an extractive sector to endogenous growth model of expanding varieties and directed technological change. Extractive firms reduce the stock non-renewable resources through extraction, but also increase R&D investment in extraction technology. Our replicates long-term trends resource markets, namely stable prices exponentially increasing for which we present data from 1792 2009. The suggests that development new technologies neutralizes demand industrializing countries like China long term.