FEEM working papers "Note di lavoro" series
2018 .026

Natural Resources, Economic Growth and Geography


Authors: Rafael González-Val, Fernando Pueyo
Series: Economic Theory
Editor: Matteo Manera
Keywords: Industrial Location, Endogenous Growth, Renewable Resource, Geography
JEL n.: F43, O30, Q20, R12

Abstract

In this paper we discuss the relationship between economic growth and natural resources at a global level, taking into account geography. With this aim, our model integrates elements of the theories of endogenous growth, natural resources and new economic geography. We find that an increase in the world growth rate can lead to a higher depletion of the natural resources following an increase in the world demand due to expansion in population. However, the consideration of geography and growth mechanisms make the relationship between growth and natural resources more complex, and can even lead to the opposite conclusion when the forces behind growth are different from world demand. Indeed, either a reduction in transport costs or an increase in R&D productivity appears to be able to generate a faster growth compatible with a lower depletion of natural resources.

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Suggested citation: González-Val, R., F. Pueyo, (2018), 'Natural Resources, Economic Growth and Geography ', Nota di Lavoro 26.2018, Milano, Italy: Fondazione Eni Enrico Mattei

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