Sustainable Economic Growth in an Economy With Exhaustible Resources and a Declining Population Under the Balance-of-Payments Constraint

Abstract

This study builds a growth model and investigates the effects of resource depletion and population increases or decreases on the growth rate of per-capita consumption in an open economy that trades with the rest of the world. We examine the two cases in which the input ratio of exhaustible resources is fixed or is determined endogenously. In both cases, depending on the conditions, the long-run growth rate of per-capita consumption can be positive, irrespective of whether the population growth rate is positive or negative.