ABSTRACT
This chapter presents the basic model and analyses paths along which the rate of growth of consumption per man is constant. It also analyses the optimal growth path of the economy. The chapter also analyses a model of economic growth in which natural resources are exhaustible, in limited supply, and essential for production. It investigates growth in competitive economies with natural resources. The chapter considers the asymptotic states of paths for which consumption is growing exponentially. It shows that in economies with natural resources, efficient growth paths which differ with respect to savings rate also differ, even asymptotically, with respect to the rate of growth. The chapter also analyses a model of economic growth in which natural resources are exhaustible, and essential for production. One of the interesting problems posed by the presence of exhaustible natural resources is that some of the basic concepts of growth theory, such as "steady state" and "natural rate of growth", need to be re-examined.
