Four essays on overlapping generations resource economies : optimality, sustainability and dynamics
Sağlam, H. Çağrı
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This dissertation is made up of four essays on overlapping generations resource economies. The Örst essay studies the e§ects of energy saving technological progress and substitution of renewable energy resources with non-renewable resources on natural resource depletion and long run growth. A growth model in two-period overlapping generations framework incorporating the presence of both resources and resource augmenting technological progress is developed. The e§ect of an increase in the intensity of the renewable resources in producing energy on long run growth is found to be positive. Although exhaustible resources are essential in production the economy can be sustained and the balanced growth path is optimal. In the second essay, the implications of assuming di§erent energy intensities for physical capital accumulation and the Önal good production is studied in an overlapping generations resource economy where energy is obtained from the extraction of the natural resources. Apart from the standard literature, physical capital accumulation is assumed to be relatively more energy-intensive than consumption. Multiple steady states, indeterminacy and bifurcations are obtained, without taking non-linearizing assumptions evident in the literature. For the non-renewable resources if the share of energy resources is low enough, local indeterminacy and hopf bifurcations may arise in the model. The aim of third essay is to analyze can costly resource extraction and di§erentiating energy intensities induce dynamics other than saddles in an overlapping generations resource economy. The capital accumulation sector is assumed to be more energy intensive. The energy input is extracted from the natural resources with some extraction costs. The main Önding of the essay is that both naturally evident assumptions contribute to the richness of the dynamics. Depending on the share of resources in capital accumulation dynamics other than saddle ñindeterminacy, áip and hopf bifurcationsñ can arise in the model for the non-zero steady state. In the fourth essay, a feedback mechanism between population and natural resource to a standard model of renewable resource based OLG economy is incorporated to check the stability of the dynamics. Multiple steady states and indeterminacy have been obtained even in the absence of logistic regeneration and independent of intertemporal elasticity of substitution. In particular, transcritical bifurcations may arise in the model varying the rate of constant regeneration with respect to population growth rate.