Abstract
This paper studies a Ramsey optimal control economy with one consumer good, extended to include several non-renewable resources with amenity value. The steady-state equilibria of this economy are shown to form a continuum. Selection of the steady state to which the economy converges depends on the initial resource stocks. Hence, unlike the usual Ramsey models, our model exhibits path-dependency, and postponement in the introduction of resource efficiency policies has long-term effects. If the resource is renewable, with a limited regeneration function, the continuum becomes a turnpike. That is, optimal paths move along it towards the unique steady state. The results also hold when there are several consumers. © 2003 Elsevier B.V. All rights reserved.
Original language | English |
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Pages (from-to) | 1159-1184 |
Number of pages | 25 |
Journal | Journal of Economic Dynamics and Control |
Volume | 28 |
Issue number | 6 |
DOIs | |
Publication status | Published - Mar 2004 |
Keywords
- Amenity value
- Equilibrium selection
- Non-renewable resources
- Path-dependence
- Steady states