The Analysis Of The Optimal Economic Growth With Constraints Of Natural Resources

Since the 1950s, because of the great technological progress and rapid economic growth, the consumption of natural resources has been increasing remarkably, and the ecology supplying the natural resources has been damaged severely. The conflict between the exhaustion of natural resources and sustained economic growth appears to be more and more noticeable, which arouses all social circles'attention and anxiety. Chinese economy has experienced high-speed growth for 30 years after the Reform and Open, and along with that numerous natural resources have inevitably been consumed. Considering that the per capita stock of natural resources is relatively small and the efficiency of exploitation is relatively poor, the problem of natural resources in China seems more serious and urgent.Under the background of the reality, founded on modern economic growth theory and sustainable development theory, this paper discusses the problem that whether the economy is able to and how to achieve a sustainable growth with constraints of natural resources.We bring the natural resources as an agent of production into the framework of optimal economic growth theory. Firstly we analyzes a neoclassical growth model with constraints of natural resources in order to show the effect that natural resources impose restrictions on sustainable economic growth. We prove that, in an economy without accumulation of human capital and technological progress, negative economic growth will appear as natural resources exhausted, in other words sustainable economic growth is impossible. Subsequently we examine the mechanism that accumulation of human capital and technological progress overcome the restrictions of natural resources in an endogenous growth model which a factor of natural resources imposed. The analytical result of the model indicates that, so long as accumulation of human capital and R&D of technology are efficient enough, the economy is able to conquer the relative scarcity and gradual exhaustion of natural resources, and so achieve sustainable growth.On the basis of the theoretical model, we conduct an empirical analysis of the relationship between natural resources and economic growth in China by treating energy as representative variable of natural resources and time series data from 1984 to 2006 as sample. Through the analysis on the results of empirical tests, we find that Chinese economic growth hasn't been hindered by natural resources yet, mainly because that the inputs of physical capital and labor force are still the main sources for Chinese economic growth. However, Chinese high-speed economic growth is obtained at the cost of excessive consumption of natural resources, which means that it would be hard to realize sustainable economic growth if the extensive economic growth mode couldn't be changed fundamentally. Although Chinese economy reacts with respects to the reform of economic system, adjustments of the structure of energy consumption and industrial structure, and R&D of energy-efficient technology, it is insufficient to get a sustainable economic growth. Especially when improvement on the efficiency of resources exploitation owing to adjustments of economic system and structures was running down, the technological progress would play a more important part in overcoming the scarcity of natural resources.Lastly, based on the above results of theoretical models and empirical analysis, we provide some proposals for policy, and point out several possible directions for further research.