The Implications of Heterogeneous Resource Intensities on Technical Change and Growth

by Karen Pittel and Lucas Bretschger

- We analyze an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. Long-term dynamics are driven by resource prices, sectoral composition, and directed technical change. We study the balanced growth path and determine stability conditions. Technical change is found to be biased towards the resource-intensive sector. Resource taxes have no impact on dynamics except when the tax rate varies over time.

Pittel, K. and L. Bretschger (2009). "The Implications of Heterogeneous Resource Intensities on Technical Change and Growth." ETH Working Paper 09/120, Oct 2009.