A New-Growth Perspective on Non- Renewable Resources

This article reviews issues related to the incorporation of non-renewable resources in the theory of economic growth and development. As an o¤shoot of the new growth theory of the last two decades a series of contributions have studied endogenous technical change in relation to resource scarcity. We discuss the main approaches within this literature and consider questions like: How is the new literature related to the wave of resource economics of the 1970s? What light is thrown on the limits-to-growth issue? Does the existence of non-renewable resources have implications for the controversies within new growth theory? Keywords: Endogenous growth; innovation; non-renewable resources; knife-edge conditions; robustness; limits to growth. JEL Classi…cation: O4, Q3. I would like to thank, but not implicate, Christian Søgaard Hansen, Poul Schou and Sjak Smulders for useful comments. * The activities of EPRU (Economic Policy Research Unit) are supported by a grant from The Danish National Research Foundation.