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Title: Essays on the use of natural resources in indebted economies
Author: Reid, Scott Thomas
Awarding Body: University of Edinburgh
Current Institution: University of Edinburgh
Date of Award: 1996
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The thesis investigates the use of natural resources in indebted economies. This issue is motivated by arguments which suggest that as a consequence of high external debt burdens developing economies have been forced to over-exploit their natural resources. The thesis employs analytical and econometric modelling techniques to assess this debt-resources link which in the more popular literature has lacked any basis in economic theory or econometric evidence. The thesis begins by placing the debt-resources link within the context of established theoretical literature. It is argued that the literature on optimal resource use and optimal foreign borrowing provides the appropriate analytical framework. The conditions under which a link between external indebtedness and natural resource use may arise are then highlighted. This discussion emphasises that any link depends on imperfections in international capital markets. The thesis then presents two theoretical models which extend earlier literature. The first model considers the optimal use of a renewable resource by a debtor economy within a continuous time framework. Capital market imperfections, unlike previous literature, are introduced through foreign borrowing constraints. Theoretical and empirical rationales for this approach are outlined. It is shown that if the economy faces a binding borrowing constraint (i.e. it is a "problem" debtor) optimal depletion of the resource stock is higher and the steady-state level of resource stock lower. The role of the discount rate in the determination of this outcome is discussed and the relevance to recent debates concerning sustainability is highlighted. The second theoretical model considers the same type of problem for the case of non-renewable resources.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available