Scarce Natural Resources, Recycling, Innovation and Growth

Authors: Markus Merz



Publication in the field of economic sciences

This thesis uses neoclassical growth models to evaluate what effect the limited availability of nonrenewable resources has on the economy’s (world’s) growth potential. Markus Merz concludes that recycling may serve as a mid-term solution to continued growth, but technological progress is needed in the long-run. The theoretical analysis starts with the well-known Dasgupta-Heal model and considers the effect of recycling and technological progress on the resource constraints; resource-augmenting and backstop technology are analyzed. After a thorough analysis of the models it is concluded that the ultimate solution to long-term economic growth is a backstop technology.

Table of contents

Introduction

An Introduction to Economic Growth Theory and the Oil Market

The Dasgupta-Heal Model

Recycling as a Source of Regeneration

Technological Progress

Discussion and Conclusions