Growth on a Finite Planet: Resources, Technology, and Population in the Long Run

54 Pages Posted: 8 Jun 2013

See all articles by Pietro F. Peretto

Pietro F. Peretto

Duke University - Department of Economics; Duke Innovation & Entrepreneurship Initiative

Simone Valente

Norwegian University of Science and Technology (NTNU)

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Date Written: April 17, 2013

Abstract

We study the interactions between technological change, resource scarcity and population dynamics in a Schumpeterian model with endogenous fertility. We fi…nd a pseudo-Malthusian equilibrium in which population is constant and determined by resource scarcity while income grows exponentially. If labor and resources are substitutes in production, income and fertility dynamics are self-balancing and the pseudo-Malthusian equilibrium is the global attractor of the system. If labor and resources are complements, income and fertility dynamics are self-reinforcing and drive the economy towards either demographic explosion or collapse. Introducing a minimum resource requirement per capita, we obtain constant population even under complementarity.

Keywords: Endogenous Innovation, Resource Scarcity, Population Growth, Fertility Choices

JEL Classification: E10, L16, O31, O40

Suggested Citation

Peretto, Pietro F. and Valente, Simone, Growth on a Finite Planet: Resources, Technology, and Population in the Long Run (April 17, 2013). Economic Research Initiatives at Duke (ERID) Working Paper No. 147, Available at SSRN: https://ssrn.com/abstract=2275338

Pietro F. Peretto (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
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Duke Innovation & Entrepreneurship Initiative ( email )

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Durham, NC 27701
United States

Simone Valente

Norwegian University of Science and Technology (NTNU) ( email )

Department of Economics
NTNU Dragvoll
Trondheim NO-7491
Norway

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