Some contributions to the theory of growth with exhaustible resource

The question of the survival of an economy endowed with a finite stock of resources has drawn much attention from economists in recent years. It is now believed that the exhaustibility of some stocks of natural resources may not be a threat to the growth of an economy. Substitution, technical progress and returns to scale may adequately make up for the dwindling stock of resources. The objective of this work is to examine two other means by which resources scarcity may be offset: they are by exploration and by trade.;One part of this thesis is concerned with optimal growth for an economy where a scarce stock of a natural resource input can be augmented by costly exploration. Four different assumptions about the exploration technology are examined. First, the yields from exploration are assumed to depend on cumulative discoveries and also on some other input representing exploratory effort. The other input may be an amount of output (first assumption) or labour (second assumption) or capital (third assumption) used in the exploration process. The fourth assumption investigated is similar to the first except that the yields from exploration here depend on the existing stock of the resource.;The four cases mentioned earlier assume that the yields from exploration are known with certainty. A case where the yields are uncertain is also examined. It is discovered that uncertainty with respect to the yields from exploration leads to rates of change of consumption, resource use and exploratory effort which are higher than the rates obtained under certain yields.;The thesis also re-examines optimum growth paths with exhaustible resources in the context of an open economy. (Abstract shortened with permission of author.).