Resources: Affluence and Limits

This lecture explores the relationship between natural resource abundance, high income, and economic growth. It discusses how resource wealth does not necessarily correlate with high incomes and growth, using examples from various countries. The curse of natural resources is also examined, highlighting the challenges faced by countries rich in resources. Hotelling's rule is introduced to explain the optimal extraction rate of finite resources and the implications for resource depletion. The lecture further delves into the concept of optimal harvesting rate and Hotelling's rule for renewable resources, emphasizing the importance of sustainable resource management.