“Exhaustible Resource and Secondary Materials: A Macroeconomic Analysis.”

In this paper we have developed an endogenous growth model to deal with exhaustible resources and secondary materials together, under the assumptions that these two inputs are, or are not, technological perfect substitutes of each other, in order to compare the results obtained under both hypotheses. We highlight the implication of these two assumptions on the rate of growth of total output and upon the flow of exhaustible resources extracted. There are also some other interesting findings relative to the spill-over on welfare of the waste recycling process, and the dynamics of shadow prices of both inputs considered. Finally, some implications on Hotelling's rule also emerge in our analytical framework