ECONOMIC INDICATORS OF RESOURCE SCARCITY - A CRITICAL-ESSAY

The theoretical arguments of the conceptual and empirical literature on economic indicators of long run resource scarcity are logically flawed. If resource allocators were informed of the nature of resource scarcity, their behavior and the economic indicators it generates would reflect the scarcity. But if they were so informed, we could simply ask them if resources were scarce. If they are not informed, their behavior and economic indicators are as likely to indicate their ignorance as the reality. Unfortunately, there is no way of knowing whether they are informed or not unless we already know whether resources are scarce. © 1990.