GOLDEN RULES FOR SUSTAINABLE RESOURCE-MANAGEMENT

This paper presents a simple model of resource management that combine s use of a non-renewable resource, such as oil, with eventual transiti on to a backstop substitute resource in infinite supply (e.g., solar e nergy). In the context of this model, we derive golden rules that gove rn efficiency in both the accumulation of capital and in the extractio n of natural natural resources for use in production. These results su pplement the Solow-Hartwick model of maximin consumption in helping to illuminate the notion of sustainable development.