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This seminar investigates a problem of optimal growth with resource exhaustibility and pollution externality, based on a unified framework that explicitly considers augmentable man-made capital, exhaustible resource reserves, and accumulative environmental pollutants as three stock variables for optimal control analysis. Characterizations of the social optimum show that for any given man-made capital and resource reserves, resource extraction flows generated in optimal growth with both resource exhaustibility and pollution externality are smaller than those with only resource exhaustibility, and taking account of pollution externality resulting from resource extraction reduces the growth rate of consumption if man-made capital and natural resources are complements in final goods production. Existence, uniqueness and comparative statics of the steady state are analysed. Conditions for transitional dynamics stability of optimal growth with resource exhaustibility and pollution externality are established. Expositions are made on whether allocations in a market equilibrium are consistent with the social optimum outcomes.
Wei Jin is currently a Vice-Chancellor’s Postdoctoral Research Fellow in the School of Economics, UNSW Business School. His research focuses on applications of the variation of calculus, optimal control theories, and differential equation with boundary-value problems to the analysis of various economic dynamic issues related to environmental and natural resource, technological progress, and economic growth. Wei Jin was previously an assistant professor of economics at Zhejiang University in China and received his PhD from the ANU in 2013. His research has been published in the_ Ecological Economics_, Energy Policy, China Economic Review, Technological Forecasting and Social Change, Annals of Operations Research, and Resource and Energy Economics.
The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.