Research and Development of a Backstop Energy Technology in a Growing Economy, Energy Economics
The sequential search for a backstop energy technology is examined using an optimal growth model with an exhaustible energy resource. It is assumed that an economic planner periodically reviews the outcomes of a stochastic R&D process. A stopping rule for R&D is obtained in terms of a minimum acceptable quality level for the innovation. The dependence of the quality standard upon capital and natural resource stocks and on the state of basic research is analysed.
Spulber, Daniel. 1980. Research and Development of a Backstop Energy Technology in a Growing Economy. Energy Economics. 2(4): 199-207.