Endogenous Economic Growth With Exhaustible Resource And Finite Period

Modern economy is built on the basis of fossil energy,and energy is the most basic driving force of world development and economic growth. However, due to the large-scale mining of exhaustible resources, people begin to worry that the world economy will collapse when the natural resources deplete. Therefore, the relationship between the sustainable economic growth and the resource-constrained becomes the hot spot in economic research.Through the endogenous technological progress, some economists, represented by Romer, Lucas etc., developed the endogenous growth theory which successfully explained the internal mechanism of sustainable economic growth. Because the exhaustible resources has become the key factor restricting the economic development, many researchers try to introduce it into the endogenous growth models, in order to find how to achieve the sustainable economic growth.Reviewing relevant research, we find that the specification of model was imperfect—the time range of the utility function was set between 0-∞, obviously, this assumption contradicts the fact that the natural resources will exhausted one day. Therefore, the model in this paper corrects this conflict, the time range of the utility function is set between 0-T. T is the time point when the resources are impoverished.The conclusion of the model in this paper is, in order to maintain the economic growth under the resource-constraint, two necessary conditions are teclnnological advance and proper increasing speed of the population.