Eric Nævdal, Frisch Centre. "The Effect Of Increased Productivity In The Management Of Renewable Resources – And Some Stuff You Didn't Know About The Ramsey–Cass–Koopmans Model"
Department seminar. Eric Nævdal is a Senior Research Fellow at the Frisch Centre. He will present the paper: "The Effect Of Increased Productivity In The Management Of Renewable Resources – And Some Stuff You Didn't Know About The Ramsey–Cass–Koopmans Model"
It is held as a truism in economics that if the marginal cost of producing some good is decreased through improved productivity it is optimal to produce more of said good. This does not apply to renewable resources such as fish. Increased productivity should imply less fishing if the fish stock is below its steady state level as opposed to an unregulated fishery where improved technology leads to more aggressive over-exploitation of a scarce resource. This result underscores the urgency for improved regulation of the world's fisheries, but is also an example of how dynamic models sometimes defy immediate intuition. The results are shown in the canonical fisheries model which is formally equivalent to the Ramsey–Cass–Koopmans growth model and derive some new results that are also pertinent to growth theory.