THE PRICE-TAKING RESOURCE-EXTRACTING FIRM
Finally we take up simple models of complete economies and inquire about the effects of resource depletion on the growth paths of the economy. We observe that population growth and finite essential stocks lead to a decline in per capita consumption. This can be viewed as T. R. Malthus with shrinking amounts of land. The special case of the current value of Hotelling rents being used to finance investment in new producible capital goods is investig ated. This leads to paths displaying a plausible notion of intergenerational equity. Technical progress is shown above to obviate economic termination. We review procedures for measuring techni cal progress in growing economies and indicate that current practices in national accounting do not treat depletion or economic depreciation of exhaustible resource stock satisfactorily.