An empirical examination of the effects of endogenous growth on exhaustible resource prices
MetadataShow full item record
AbstractThis paper examines the role that technological change plays in the price paths of natural resource commodities. The theory of endogenous technological change suggests that the more important a resource is in the world economy, the more likely there will be innovation. The hypothesis tested in this paper is that periods of price declines for natural resources and minerals is induced by endogenous technical change. The nature of the relationship between prices and the share in the world economy is complicated by the fact that the resources price appears in both the growth rate of the price and the share of the world economy. This forces us to deal with the "reflection" problem in econometrics. Once this is done, we find that there is indeed a negative correlation between the rate of growth of prices and the share of the resource in the world economy.
Bibliography: p. 35-37