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Growth and Exhaustible Resources

 

  • (with James A. Mirrlees) “Agreeable Plans,” in J.A. Mirrlees and N.H. Stern (eds.) Models of Economic Growth (Proceedings of a Conference of the International Economic Association, Jerusalem, 1970) (London: Macmillan, 1973), ch. 13, pp. 283–299.


  • “Agreeable Plans with Many Capital Goods,” Review of Economic Studies 42 (1975), 1–14.

    Abstract:
    In planning capital accumulation, only an interim plan, or overture, needs to be chosen initially. “Agreeable” plans exploit this fact; they lead to accumulation paths which are nearly optimal, provided that the time-horizon is long and is known far enough in advance. An earlier treatment of one-good models is extended to models with many capital goods. It is shown that, in many cases, an “insensitive path” — the limit of finite-horizon optimal paths — is agreeable. Also, with a convex technology and a strictly concave welfare function, if an agreeable plan exists, it must be insensitive and also unique.
    JSTOR link for paper


  • (with Edwin Burmeister) “Maximin Paths of Heterogeneous Capital Accumulation and the Instability of Paradoxical Steady States,” Econometrica 45 (1977), 853–870.

    Abstract:
    If there exist heterogeneous capital goods, a steady state may be “paradoxical” in the sense that increasing the rate of interest above the Golden Rule level may lead to an increase in consumption or utility, rather than to the decrease which always occurs in one-sector models. It is shown that, in many cases, a path of capital accumulation which maximizes the minimum consumption or utility level is unlikely to converge to a paradoxical steady state of this kind.
    JSTOR link for paper


  • (with John F. Kennan) “Uniformly Optimal Infinite Horizon Plans,” International Economic Review 20 (1979), 283–296.

    Abstract:
    A plan is defined to be uniformly optimal if, for all positive epsilon and all long enough time horizons, it is uniformly not epsilon-inferior to all alternative plans. It is shown that uniformly optimal plans are “agreeable” in a strong sense. In some cases, too, finite horizon optimal plans may converge to a uniformly optimal plan as the horizon tends to infinity. It is also shown that, in most cases where it is known that an optimal plan exists, any optimal plan is uniformly optimal.
    JSTOR link for paper


  • (with Avinash K. Dixit and Michael Hoel) “On Hartwick's Rule for Constant Utility and Regular Maximin Paths of Capital Accumulation and Resource Depletion,” Review of Economic Studies 47 (1980), 551–6.

    Abstract:
    Hartwick’s rule of investing resource rents in an economy with producible capital and exhaustible resources becomes, in a general model of heterogeneous stocks, a rule whereby the total value of net investment (resource depletion counting negative) is equal to zero. It is shown that holding the discounted present value of net investment constant is necessary and sufficient for a competitive path to give constant utility. With free disposal, it is shown that, provided the Hartwick rule yields a path that does not exhibit “stock reversal,” it must be a maximin path
    JSTOR link for paper


  • (with Andrés Rodríguez-Clare) “On Endogenizing Long-Run Growth,” Scandinavian Journal of Economics 95 (1993), 391–425; also in T.M. Andersen and K.O. Moene (eds.) Endogenous Growth (Oxford: Blackwell, 1993), pp. 1–35.

    Abstract:
    This assessment of recent theoretical work on endogenous growth identifies three different engines of long-run growth: (i) the asymptotic average product of capital is positive; (ii) labor productivity increases as an external effect of capital accumulation; (iii) there are feedback effects on the cost of accumulating knowledge or innovating. A general model encompassing all three is considered, and then used to review different proposed determinants of long-run growth rates. The contribution of endogenous growth theory has been to create a framework in which to explain why economic institutions and policies can have long-run effects on growth rates.
    PDF version of preprint


  • Overture Plans of Accumulation for an Infinite Horizon,” University of Essex, Economics Discussion Paper No. 52 (1974).


  • Discussion of A.K. Dixit, “Comparative Dynamics from the Point of View of the Dual” in J.M. Parkin (ed.), Modern Economics (Proceedings of the Conference of the Association of University Teachers of Economics, Aberystwyth, 1972), pp. 47–49.