The Hartwick Rule

The Hartwick Rule states that for a country with finite natural resources, sustainable economic growth can be maintained if any income earned from extracting those resources is reinvested into productive capital, like infrastructure or human skills, rather than spent. By doing so, the nation replaces the depreciated resource stock with other forms of capital, ensuring future income stays steady or grows. Essentially, it provides a way to manage natural resources so that resource extraction doesn’t lead to long-term decline in economic well-being.