Strategic Resource Extraction, Capital Accumulation and Overlapping Generations

11 Pages Posted: 13 Jul 2004 Last revised: 21 Nov 2022

See all articles by Leonard J. Mirman

Leonard J. Mirman

University of Virginia - Department of Economics

Ted To

Bureau of Labor Statistics

Date Written: July 1, 2004

Abstract

The standard resource extraction framework assumes infinitely lived agents and yields an overfishing result. For some applications, a finite time horizon may be more appropriate. A direct extension of the Levhari-Mirman model to overlapping generations yields an extreme overfishing result. Alternatively, we assume young and old specialize and respectively fish and supply capital. In this model, under some circumstances there may well be under-utilization of natural, renewable resources. However, for a given production technology, if there are a sufficiently large number of agents, overfishing always results.

Keywords: Renewable resource, overlapping generations, Golden Rule

JEL Classification: L13, Q20

Suggested Citation

Mirman, Leonard J. and To, Ted, Strategic Resource Extraction, Capital Accumulation and Overlapping Generations (July 1, 2004). Journal of Environmental Economics and Management, Forthcoming, Available at SSRN: https://ssrn.com/abstract=564041 or http://dx.doi.org/10.2139/ssrn.564041

Leonard J. Mirman

University of Virginia - Department of Economics ( email )

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Ted To (Contact Author)

Bureau of Labor Statistics ( email )

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