Economic Growth in the Conditions of Resource Constraints: Ordinal Approach to Optimization of Macroeconomic Production Structure
Economic Growth in the Conditions of Resource Constraints: Ordinal Approach to Optimization of Macroeconomic Production Structure

Summary/Abstract: This article approaches the problems of economic growth and development in the conditions of limitation and non-reproducibility of part of the natural resources that determine the limits of extensive growth. An ordinal approach employed in microeconomic theory in the interpretation of the rational production was used to justify the criterion of optimization of the production structure at the macro level of the economic system and to determine the conditions under which the maximum possible rates of balanced economic development within existing resource constraints are achieved. An analysis of the proposed model reveals the feasibility of the threats associated with the possible ecological and economic collapse in the conditions of the extensive economic growth. At the same time, it confirms the possibility to avoid negative scenarios of development related to the reduction of stocks of non-reproducible natural resources and weakening of the recreational opportunities of the ecological system. The conclusion was justified that the conditions for sustainable development are balanced economic growth, optimization of the macroeconomic structure of production, large-scale investment in the development and implementation of "closing" technologies that reduce demand for energy and raw materials while maintaining and expanding the production capacity of the economic system, as well as the formation of an effective innovation system that ensures implementation of scientific achievements and new technical and technological solutions in the production process.

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