International Trade and Open-Access Renewable Resources: The Small Open Economy Case
AbstractThe authors examine a small open economy with an open-access renewable resource. Using a two-sector general equilibrium model, they characterize the autarkic steady state and then show that trade reduces steady-state utility for a diversified resource exporter. Instantaneous gains occur as trade opens but they are eroded by ongoing resource depletion. The present value of utility falls for appropriate discount rates and terms-of-trade 'improvements' may be welfare reducing. The authors also show that autarky prices, the pattern of trade, and the structure of production all are linked to a simple ratio of the intrinsic resource growth rate to labor supply.
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Bibliographic InfoArticle provided by Canadian Economics Association in its journal Canadian Journal of Economics.
Volume (Year): 30 (1997)
Issue (Month): 3 (August)
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Other versions of this item:
- James A. Brander & M. Scott Taylor, 1995. "International Trade and Open Access Renewable Resources: The Small Open Economy Case," NBER Working Papers 5021, National Bureau of Economic Research, Inc.
- F10 - International Economics - - Trade - - - General
- Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
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