Article Review
Abstract
For a long time, economist have been attempting to extrapolate the relationship between the depletion of exhaustible resources and future economic growth. This paper looks into this by reviewing the article “Scarce or Abundant? The Economic of Natural Resource Availability” that is authored by Eric Neumayer. The first element of the review will be a discussion of the main issue described in the article. The next section of the article review will be a discussion of the methodology and the data that has been used. The review will then look at the main findings and conclusions noted down by the author. The other section of the review and which is of crucial importance is a description of other articles that have cited the content of this Neumayer’s article. The final part of the review will be an analysis of the usefulness and readability of the article.
In this article, Neumayer explores the depletion of natural resources and the impact that this is likely to have on future economic growth. According to Neumayer, most of the resources that the natural world has been endowed with are non-renewable. This means that when these resources are exhausted, they cannot be rejuvenates in any way. What impact does this trend have on the economic growth in the future? In answering this question, Neumayer uses the hypothesis put forward by many economists that the continuous depletion of natural resources and a decrease in their availability is likely to impede the growth of the economy of the future. In addition, Neumayer also looks at the argument by modern neoclassical economist who have showed a lot of optimism in regards to natural resources availability. These issues essentially form the core of this article.
The methodology adopted in this case study is that of a systematic review. This is a type of secondary research whereby the researcher does not conduct actual field or primary research, but reviews material that has already been published on the issue. In this particular article, Neumayer engages in an exhaustive review of materials that explore the relationship between future economic growth and the depletion of natural resource. To get different points of views and to eliminate any bias or inconsistencies, the materials reviewed are of different nature. These include journal articles, books, periodicals, newspapers, government and research bodies’ publications, magazines amongst other sources. The author deduces the content from these materials, analyzes and compares them to come up with a viable conclusion.
In order to find out more about the issue, the author collects various sets of data from published literature. One of the most prominent series of data collected and analyzed by the author is population growth in the last few years. The author uses the rates and patterns of population growth to deduce the impact that it has on the availability as well as the distribution of natural resources. The author looks at the prices of natural resources and how these prices have changed over the years. One of the factors affecting the prices of natural resources is the demand, and this is the other type of data examined by the researcher. The researcher uses all these different series of data and examines their relationship to economic growth.
There are several findings and conclusions that are made by the author in this particular study. One of the conclusions made by the author of the study is that when the price of a certain resource rises, there is increased substitution of the product for another cheaper and abundant one within the society. The author also finds that resources that are man-made can be substituted with natural capital. Another conclusion drawn by the author is that when the price of certain resource goes, the rates of recycling in that specific resource goes up. In addition, there is increased exploration and subsequent extraction of low quality and low-value ores. The overall conclusion made by the author is that technical progress usually increases the efficiency in the use of natural resources. However, the summed up conclusion from the analysis of literature is that while it might be true that depletion of natural resources may not necessarily be a constraint to future growth of the economy, it is not possible to accurately predict whether resource constraints are possible to overcome in the future.
This article has been cited in several articles. One of these articles is by C. Groth and P Schou (2002), and is titled “Can non-renewable resources alleviate the knife-edge character of endogenous growth”. Here the article is cited to show that the effect of depletion of natural resources in economic growth is not accurately identifiable or predictable.
Another article that has cited this article is “Growth in overlapping generation economies with non-renewable resources” by Agnani (2005) where the authors uses some of the findings of Neumayer to show that the depletion of natural resources does not necessary spell doom for future economic growth.
This article is of great usefulness because it touches on two contemporary issues that affect the current society; economic growth and natural resources depletion. The article is easy flowing and is devoid of complex jargon making it very readable and understandable even to a layman who does not have much knowledge on economics.
I would like to thank Neumayer, Groth and Schou whose content I have utilized to complete this paper.
References
Agnani, B., Gutiérrez, M. J., & Iza, A. (2005). Growth in overlapping generation economies with non-renewable resources. Journal of Environmental Economics and Management, 50(2), 387-407.
Dietz, S., & Neumayer, E. (2007). Weak and strong sustainability in the SEEA: Concepts and measurement. Ecological Economics, 61(4), 617-626.
Groth, C., & Schou, P. (2002). Can non‐renewable resources alleviate the knife‐edge character of endogenous growth?. Oxford Economic Papers, 54(3), 386-411.
Neumayer, E. (2000). Scarce or abundant? The economics of natural resource availability. Journal of Economic Surveys, 14(3), 307-335.
Perraton, J. (2006). Heavy Constraints on a “Weightless World”?. American Journal of Economics and Sociology, 65(3), 641-691.
