The Inada conditions for material resource inputs reconsidered

Arbeitspapier

It is shown that the thermodynamic law of conservation of mass, the so-called Materials-Balance-Principle, implies that the marginal product as well as the average product of a material resource input are bounded from above. This means that the Inada conditions, one of the standard assumptions of economic growth theory, when applied to material resource inputs are inconsistent with a basic law of nature. The analysis is based on a model of multi-level production where intermediate goods are produced from elementary resources, and an all-purpose final commodity is produced from these intermediates.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 396

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Neoclassical ; Economic Growth and Aggregate Productivity: General ; Nonrenewable Resources and Conservation: General
• Subject: conservation of mass ; Inada conditions ; materials balance principle ; natural resources ; production function ; thermodynamics ; Thermodynamischer Ansatz ; Stoffstrommanagement

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baumgärtner, Stefan
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/127213
• Last update: 10.03.2025, 11:43 AM CET