Stiglitz examines the impact of exhaustible natural resources on economic growth and optimal growth paths. He argues that while Malthusian concerns about resource limits were overly pessimistic, economic factors such as technical change, substitution of capital for natural resources, and returns to scale can offset these limitations. The paper analyzes how sustainable per capita consumption is possible and characterizes steady-state paths in economies with natural resources. It also explores the optimal growth path, focusing on the optimal rate of resource extraction and savings rate. Key findings include the need to re-examine growth theory concepts like the "natural rate of growth" in the presence of exhaustible resources. The analysis shows that efficient growth paths differ based on savings rates, even asymptotically. The paper introduces a model with Cobb-Douglas technology, where output depends on capital, labor, and natural resources. It derives conditions for sustainable growth and shows that the optimal growth path depends on the rate of technical progress, population growth, and the share of natural resources. The paper also discusses the implications of exhaustible resources on long-term growth. It shows that with technical progress and capital accumulation, economies can sustain growth even with limited natural resources. However, maintaining a constant level of per capita consumption requires a higher rate of technical progress. The analysis highlights that the optimal growth path involves a trade-off between current and future consumption, with higher savings leading to higher long-term growth but lower current consumption. The paper concludes that the presence of exhaustible resources does not necessarily lead to economic stagnation. Instead, technical progress and capital accumulation can offset the decline in natural resource availability. The study emphasizes the importance of considering the intertemporal trade-offs in resource utilization and savings decisions. The results suggest that the optimal growth path depends on the relative importance of capital and natural resources, with the latter being more critical for sustaining long-term growth. The paper also notes that the optimal rate of resource extraction is influenced by the rate of technical progress and the elasticity of marginal utility.Stiglitz examines the impact of exhaustible natural resources on economic growth and optimal growth paths. He argues that while Malthusian concerns about resource limits were overly pessimistic, economic factors such as technical change, substitution of capital for natural resources, and returns to scale can offset these limitations. The paper analyzes how sustainable per capita consumption is possible and characterizes steady-state paths in economies with natural resources. It also explores the optimal growth path, focusing on the optimal rate of resource extraction and savings rate. Key findings include the need to re-examine growth theory concepts like the "natural rate of growth" in the presence of exhaustible resources. The analysis shows that efficient growth paths differ based on savings rates, even asymptotically. The paper introduces a model with Cobb-Douglas technology, where output depends on capital, labor, and natural resources. It derives conditions for sustainable growth and shows that the optimal growth path depends on the rate of technical progress, population growth, and the share of natural resources. The paper also discusses the implications of exhaustible resources on long-term growth. It shows that with technical progress and capital accumulation, economies can sustain growth even with limited natural resources. However, maintaining a constant level of per capita consumption requires a higher rate of technical progress. The analysis highlights that the optimal growth path involves a trade-off between current and future consumption, with higher savings leading to higher long-term growth but lower current consumption. The paper concludes that the presence of exhaustible resources does not necessarily lead to economic stagnation. Instead, technical progress and capital accumulation can offset the decline in natural resource availability. The study emphasizes the importance of considering the intertemporal trade-offs in resource utilization and savings decisions. The results suggest that the optimal growth path depends on the relative importance of capital and natural resources, with the latter being more critical for sustaining long-term growth. The paper also notes that the optimal rate of resource extraction is influenced by the rate of technical progress and the elasticity of marginal utility.