Existence and efficiency of stationary states in a renewable resource based OLG model with different harvest costs

Harvest costs can reduce the incentive to overexploit a renewable resource stock, particularly when costs are stock dependent. This paper compares different types of harvest costs in a renewable resource based overlapping generations (OLG) model in which resource harvest competes with commodity production for labor. We analyze under which conditions a stationary state market equilibrium exists and whether this equilibrium is intergenerationally efficient. We find that stock dependent harvest costs favor the existence of an equilibrium and that a positive own rate of return on the resource stock is no longer necessary for intergenerational efficiency. Whether constant or inversely stock dependent, harvest cost in general equilibrium necessitate the inquiry of a positive resource stock price to ensure the existence of a stationary state market equilibrium.