Natural Resources

The chapter develops the theory of optimal depletion for exhaustible resources, since exhaustion of fixed resources, even allowing for discoveries, is in the cards for these resources.The best strategy people can adopt is to mine them at the rate that allows their consumption to be the highest for the longest time. The chapter turns to the theory of optimal use of a renewable resource: since the stocks of these resources can be regenerated, it is possible to find the harvest rate that will be sustainable - essentially forever, or at least for discountable planning horizons. It looks at how the author might infer resource scarcity from observable indicators. The great nonrenewable resource exploitation industries of the ancient Mediterranean, the smelting of the seven principal metals of antiquity - copper, tin, arsenic, lead, iron, gold, and silver - operated closely with the exploitation of one of the principal renewable resources, forests.