Scarcity, growth and R&D

Yacov Tsur, Amos Zemel

    Research output: Contribution to journalArticlepeer-review

    51 Scopus citations


    The limits to economic growth due to resource scarcity can be alleviated only by the development of backstop substitutes. This paper combines resource-based economic growth with R&D to reduce the cost of backstop technologies. Characterizing the entire dynamics of optimal growth and R&D processes, we find that an economy's growth prospects depend on its type, as determined by its production technology and learning ability, and by its knowledge-capital endowment. A wide variety of growth patterns emerges, ranging from cases in which an economy that without R&D eventually stagnates (converges to a steady state) is diverted by R&D onto a path of sustained growth, to cases in which R&D is not warranted. Resource scarcity is shown to encourage R&D due to the increased reliance on the backstop technology.

    Original languageEnglish
    Pages (from-to)484-499
    Number of pages16
    JournalJournal of Environmental Economics and Management
    Issue number3
    StatePublished - 1 Jan 2005


    • Backstop technology
    • Economic growth
    • Non-renewable resources
    • R&D
    • Scarcity

    ASJC Scopus subject areas

    • Economics and Econometrics
    • Management, Monitoring, Policy and Law


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