To sustain constant consumption the Hartwick rule prescribes reinvesting all resource rents in reproducible capital. This paper shows that the rule does not apply to open economies, since the underlying stationary technology assumption is violated when gains from trade are taken into account. A correct analog to the Hartwick rule for open economies is developed and applied to a model of capital accumulation and resource depletion.
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(2007). Hartwick's Rule in Open Economies. In: Justifying, Characterizing and Indicating Sustainability. Sustainability, Economics, and Natural Resources, vol 3. Springer, Dordrecht. https://doi.org/10.1007/978-1-4020-6200-1_9
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DOI: https://doi.org/10.1007/978-1-4020-6200-1_9
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