This thesis uses neoclassical growth models to evaluate what effect the limited availability of
nonrenewable resources has on the economy's (world's) growth potential. Markus Merz concludes
that recycling may serve as a mid-term solution to continued growth but technological progress
is needed in the long-run. The theoretical analysis starts with the well-known Dasgupta-Heal
model and considers the effect of recycling and technological progress on the resource
constraints resource-augmenting and backstop technology are analyzed. After a thorough
analysis of the models it is concluded that the ultimate solution to long-term economic growth
is a backstop technology.
