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Free trade may save a renewable resource from exhaustion

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  • Akihiho Yanase

    ()
    (Tohoku University)

Abstract

This study considers a small open economy in which two tradable final goods are produced by using a non-tradable resource good, which has an open-access property, as an input as well as a primary factor. If the intrinsic growth rate of the resource is relatively low, there may be no non-trivial steady state or multiple steady states. This implies that, by opening international trade, the economy can escape from the risk of complete depletion of the resource.

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File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I1-P22.pdf
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Bibliographic Info

Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 33 (2013)
Issue (Month): 1 ()
Pages: 226-233

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Handle: RePEc:ebl:ecbull:eb-12-00783

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Related research

Keywords: International trade; Open-access renewable resources; Intermediate good; Multiple steady states; Resource depletion;

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  1. James Brander & M. Scott Taylor, 1997. "International Trade Between Consumer and Conservationist Countries," NBER Working Papers 6006, National Bureau of Economic Research, Inc.
  2. Brander, James A. & Scott Taylor, M., 1998. "Open access renewable resources: Trade and trade policy in a two-country model," Journal of International Economics, Elsevier, vol. 44(2), pages 181-209, April.
  3. 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.
  4. Naoto Jinji, 2006. "International trade and terrestrial open-access renewable resources in a small open economy," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 790-808, August.
  5. Naoto Jinji, 2007. "International trade and renewable resources under asymmetries of resource abundance and resource management," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(4), pages 621-642, August.
  6. Karp, Larry & Sacheti, Sandeep & Zhao, Jinhua, 1999. "Common ground between free-traders and environmentalists," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt7jw3t8pw, Department of Agricultural & Resource Economics, UC Berkeley.
  7. Rögnvaldur Hannesson, 2000. "Renewable resources and the gains from trade," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 122-132, February.
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