{"id":8770,"date":"2022-07-27T06:33:32","date_gmt":"2022-07-27T06:33:32","guid":{"rendered":"https:\/\/depocen.org\/publications\/with-exhaustible-resources-can-a-developingcountry-escape-from-the-poverty-trap\/"},"modified":"2022-07-27T06:33:32","modified_gmt":"2022-07-27T06:33:32","slug":"with-exhaustible-resources-can-a-developingcountry-escape-from-the-poverty-trap","status":"publish","type":"publications","link":"https:\/\/depocen.org\/vi\/publications\/with-exhaustible-resources-can-a-developingcountry-escape-from-the-poverty-trap\/","title":{"rendered":"With Exhaustible Resources, Can A Developing\r\nCountry Escape From The Poverty Trap?"},"content":{"rendered":"<p>This paper studies the optimal growth of a developing non-renewable natural<br \/>\nresource producer, which extracts the resource from its soil, and produces<br \/>\na single consumption good with man-made capital. Moreover, it<br \/>\ncan sell the extracted resource abroad and use the revenues to buy an<br \/>\nimported good, which is a perfect substitute of the domestic consumption<br \/>\ngood. The domestic technology is convex-concave, so that the economy<br \/>\nmay be locked into a poverty trap. We study the optimal extraction and<br \/>\ndepletion of the exhaustible resource, and the optimal paths of accumulation<br \/>\nof capital and of domestic consumption. We show that the extent<br \/>\nto which the country will optimally escape from the poverty trap and the<br \/>\nexhaustible resource will be a blessing depends on the characteristics of its<br \/>\ntechnology and of the revenues from the resource function, on its impatience,<br \/>\non the level of its initial stock of capital, and on the abundance of<br \/>\nthe natural resource. If the marginal productivity of capital at the origin<br \/>\nis greater than the sum of the social discount rate and the depreciation<br \/>\nrate, the country will accumulate capital along the entire growth path,<br \/>\nand will escape from the poverty trap, whatever its initial stocks of capital<br \/>\nand resource, and provided that the marginal revenue obtained from<br \/>\nthe exportation of the resource is finite at the origin. On the contrary,<br \/>\nif the marginal productivity of capital is lower than the depreciation rate<br \/>\nwhatever the level of capital, and if moreover the initial stock of capital<br \/>\nis small, then the country will never accumulate; it will consume the revenues<br \/>\nobtained from selling abroad the extracted resource, until there is no resource left and the economy collapses. We also show that any optimal<br \/>\npath may be decentralized in a competitive equilibrium by using a<br \/>\ntax\/subsidy scheme for firms.<\/p>\n","protected":false},"featured_media":0,"template":"","cate_publications":[],"author_publications":[1556,1590,1591],"topic_publications":[],"class_list":["post-8770","publications","type-publications","status-publish","hentry","author_publications-cuong-le-van","author_publications-katheline-schubert","author_publications-tu-anh-nguyen-2"],"acf":[],"_links":{"self":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/publications\/8770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/publications"}],"about":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/types\/publications"}],"wp:attachment":[{"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/media?parent=8770"}],"wp:term":[{"taxonomy":"cate_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/cate_publications?post=8770"},{"taxonomy":"author_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/author_publications?post=8770"},{"taxonomy":"topic_publications","embeddable":true,"href":"https:\/\/depocen.org\/vi\/wp-json\/wp\/v2\/topic_publications?post=8770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}