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Working Paper
Non-renewable resources, extraction technology, and endogenous growth
We document that global resource extraction has strongly increased with economic growth, while prices have exhibited stable trends for almost all major non-renewable resources from 1700 to 2018. Why have resources not become scarcer as suggested by standard economic theory? We develop a theory of extraction technology, geology and growth grounded in stylized facts. Rising resource demand incentivises firms to invest in new technology to increase their economically extractable reserves. Prices remain constant because increasing returns from the geological distribution of resources offset ...
Solving a Puzzle: More Nonrenewable Resources Without Higher Prices
Economic intuition suggests nonrenewable resources such as metals or fossil fuels become scarcer and more expensive over time. However, a new dataset covering the years 1700 to 2018 indicates otherwise.