[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_299.html
   My bibliography  Save this paper

The Hartwick Rule: Myths and Facts

Author

Listed:
  • Geir B. Asheim
  • Wolfgang Buchholz
Abstract
We consider the Hartwick rule for capital accumulation and resource depletion, provide semantic clarifications and investigate whether this rule indicates sustainability and requires substitutability between manmade and natural capital. In addition to shedding light on the meaning of the Hartwick rule by reviewing established results, we establish the following novel finding: The value of net investments being negative does not imply that utility is unsustainable. Throughout we make the assumption of a constant technology, without which the Hartwick rule does not apply.

Suggested Citation

  • Geir B. Asheim & Wolfgang Buchholz, 2000. "The Hartwick Rule: Myths and Facts," CESifo Working Paper Series 299, CESifo.
    • Handle: RePEc:ces:ceswps:_299
    as

    Download full text from publisher

    File URL: https://www.cesifo.org/DocDL/cesifo_wp299.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Avinash Dixit & Peter Hammond & Michael Hoel, 1980. "On Hartwick's Rule for Regular Maximin Paths of Capital Accumulation and Resource Depletion," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(3), pages 551-556.
    2. Thomas Aronsson & Per-Olav Johansson, 1997. "Welfare Measurement, Sustainability and Green National Accounting," Books, Edward Elgar Publishing, number 1240.
    3. Heal, Geoffrey M., 1993. "The optimal use of exhaustible resources," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 18, pages 855-880, Elsevier.
    4. John Pezzey & Cees A. Withagen, 1998. "The Rise, Fall and Sustainability of Capital‐Resource Economies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 100(2), pages 513-527, June.
    5. Buchholz Wolfgang, 1980. "Intergenerational Equity, a Savings Investment Rule, and the Efficient Allocation of an Exhaustible Resource: Intergenerational Equity, a Savings Investment Rule, and the Efficient Allocation of an Ex," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 195(3), pages 271-274, March.
    6. Cass, David & Mitra, Tapan, 1991. "Indefinitely Sustained Consumption Despite Exhaustible Natural Resources," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 1(2), pages 119-146, April.
    7. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 29-45.
    8. Kirk Hamilton, 1995. "Sustainable development, the Hartwick rule and optimal growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(4), pages 393-411, June.
    9. repec:bla:scandj:v:96:y:1994:i:2:p:257-65 is not listed on IDEAS
    10. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(1), pages 156-162.
    11. Hanley, Nick & Shogren, Jason & White, Ben, 2013. "Introduction to Environmental Economics," OUP Catalogue, Oxford University Press, edition 2, number 9780199568734.
    12. John C. V. Pezzey, 2002. "One-sided Unsustainability Tests and NNP Measurement with Multiple Consumption Goods," Economics and Environment Network Working Papers 0208, Australian National University, Economics and Environment Network.
    13. Withagen, Cees & B. Asheim, Geir, 1998. "Characterizing sustainability: The converse of Hartwick's rule," Journal of Economic Dynamics and Control, Elsevier, vol. 23(1), pages 159-165, September.
    14. John Hartwick, 1977. "Intergenerational Equity and the Investment of Rents from Exhaustible Resources in a Two Sector Model," Working Paper 281, Economics Department, Queen's University.
    15. Vellinga, Nico & Withagen, Cees, 1996. "On the Concept of Green National Income," Oxford Economic Papers, Oxford University Press, vol. 48(4), pages 499-514, October.
    16. repec:bla:scandj:v:100:y:1998:i:2:p:513-27 is not listed on IDEAS
    17. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(5), pages 3-28.
    18. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    19. Swapan Dasgupta & Tapan Mitra, 1999. "On the Welfare Significance of National Product for Economic Growth and Sustainable Development," The Japanese Economic Review, Japanese Economic Association, vol. 50(4), pages 422-442, December.
    20. Dasgupta, Swapan & Mitra, Tapan, 1983. "Intergenerational Equity and Efficient Allocation of Exhaustible Resources," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(1), pages 133-153, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mitra, Tapan, 2002. "Intertemporal Equity and Efficient Allocation of Resources," Journal of Economic Theory, Elsevier, vol. 107(2), pages 356-376, December.
    2. Geir B. Asheim, 2003. "Green national accounting for welfare and sustainability:A Taxonomy Of Assumptions And Results," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(2), pages 113-130, May.
    3. van der Ploeg, Frederick, 2010. "Why do many resource-rich countries have negative genuine saving?: Anticipation of better times or rapacious rent seeking," Resource and Energy Economics, Elsevier, vol. 32(1), pages 28-44, January.
    4. Asheim, Geir B., 2000. "Green national accounting: why and how?," Environment and Development Economics, Cambridge University Press, vol. 5(1), pages 25-48, February.
    5. Michel Moreaux & Jean-Pierre Amigues, 2008. "Efficient and Optimal Capital Accumulation under a Non Renewable Resource Constraint," Revue d'économie politique, Dalloz, vol. 118(6), pages 791-825.
    6. Wolfgang Buchholz & Swapan Dasgupta & Tapan Mitra, 2005. "Intertemporal Equity and Hartwick's Rule in an Exhaustible Resource Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 547-561, September.
    7. Toman, Michael & Pezzey, John C., 2002. "The Economics of Sustainability: A Review of Journal Articles," RFF Working Paper Series dp-02-03, Resources for the Future.
    8. Nick Hanley & Louis Dupuy & Eoin McLaughlin, 2015. "Genuine Savings And Sustainability," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 779-806, September.
    9. Geir B. Asheim & Wolfgang Buchholz, 2004. "A General Approach to Welfare Measurement through National Income Accounting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(2), pages 361-384, June.
    10. Asheim, Geir B. & Buchholz, Wolfgang & Hartwick, John M. & Mitra, Tapan & Withagen, Cees, 2007. "Constant savings rates and quasi-arithmetic population growth under exhaustible resource constraints," Journal of Environmental Economics and Management, Elsevier, vol. 53(2), pages 213-229, March.
    11. Asheim, Geir B. & Hartwick, John M. & Yamaguchi, Rintaro, 2023. "Sustainable per capita consumption under population growth," Resource and Energy Economics, Elsevier, vol. 73(C).
    12. Thomas Aronsson & Karl-Gustaf Löfgren (ed.), 2010. "Handbook of Environmental Accounting," Books, Edward Elgar Publishing, number 12796.
    13. Mitra, Tapan & Asheim, Geir B. & Buchholz, Wolfgang & Withagen, Cees, 2013. "Characterizing the sustainability problem in an exhaustible resource model," Journal of Economic Theory, Elsevier, vol. 148(5), pages 2164-2182.
    14. Geir B. Asheim & Tapan Mitra, 2021. "Characterizing sustainability in discrete time," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(2), pages 461-481, March.
    15. Doyen, L. & Martinet, V., 2012. "Maximin, viability and sustainability," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1414-1430.
    16. Geir B. Asheim & Rintaro Yamaguchi, 2023. "Comprehensive National Accounting for Carbon Emissions," CESifo Working Paper Series 10562, CESifo.
    17. Antony, Jürgen & Klarl, Torben, 2023. "Subsistence consumption and natural resource depletion: Can resource-rich low-income countries realize sustainable consumption paths?," Journal of Macroeconomics, Elsevier, vol. 77(C).
    18. Asheim, Geir B. & Hartwick, John M. & Mitra, Tapan, 2021. "Investment rules and time invariance under population growth," Journal of Economic Dynamics and Control, Elsevier, vol. 123(C).
    19. Kirk Hamilton & John M. Hartwick, 2005. "Investing exhaustible resource rents and the path of consumption," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(2), pages 615-621, May.
    20. Vincent, Jeffrey R. & Panayotou, Theodore & Hartwick, John M., 1997. "Resource Depletion and Sustainability in Small Open Economies," Journal of Environmental Economics and Management, Elsevier, vol. 33(3), pages 274-286, July.

    More about this item

    Keywords

    Hartwick rule; natural resources; sustainability;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_299. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/cesifde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.