Exhaustible Resources, Technology Choice and Industrialization of Developing Countries

Reprint No. 2012:36

Author(s): Erika Färnstrand DamsgaardYear: 2012 Title: Resource and Energy Economics Volume (No.): 34 (3) Pages: 271–294
Online article (restrictions may apply)
Preliminary version

How should the world economy adapt to the increased demand for exhaustible resources fromcountries like Chinaand India? Toaddress that issue, this paper presents a dynamicmodel of the world economy with two technologies for production; a resource technology, which uses an exhaustible resource as an input and an alternative technology, which does not. I find that both the time path of resource extraction and the adoption of the alternative technology depend on the optimal allocation of capital across the technologies, and on the size of the capital stock in relation to the resource stock. In particular, if thecapital stockislow, only the resource technology is used initially and the alternative technology is adopted with a delay. Next, I use the model to analyze the effects of industrialization of developing countries on the extraction of oil and technology choice for energy production. As a result of industrialization, the alternative technology for energy production is adopted earlier.

Färnstrand Damsgaard, Erika (2012), "Exhaustible Resources, Technology Choice and Industrialization of Developing Countries". Resource and Energy Economics 34(3), 271–294.

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 | info@ifn.se