Innovation and Limits to Growth

In a basic growth model, some finite resource is consumed at a rate such that the resource is eventually depleted. When that happens the growth that was dependent on that resource stops and the system begins to collapse. If it happens that the resource is renewable eventually the rate of consumption matches the rate of renewal and the system enters into a state of equilibrium (no growth). This is illustrated by the black line in Figure 1. In this second scenario if the rate of consumption exceeds the rate of renewal the system will again collapse.

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