The capital gains from trade are not enough: evidence from the environmental accounts of Venezuela and Mexico
AbstractIn principle, a country can not endure negative genuine savings for long periods of time without experiencing declining consumption. Nevertheless, theoreticians envisage two alternatives to explain how an exporter of non-renewable natural resources could experience permanent negative genuine savings and still ensure sustainability. The first one alleges that the capital gains arising from the expected improvement in the terms of trade would suffice to compensate for the negative savings of the resource exporter. The second alternative points at technological change as a way to avoid economic collapse. This paper uses the data of Venezuela and Mexico to empirically test the first of these two hypotheses. The results presented here prove that the terms of trade do not suffice to compensate the depletion of oil reserves in these two open economies.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Environmental Economics and Management.
Volume (Year): 48 (2004)
Issue (Month): 3 (November)
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Web page: http://www.elsevier.com/locate/inca/622870
Other versions of this item:
- M. del Mar Rubio, 2003. "The capital gains from trade are not enough: Evidence from the environmental accounts of Venezuela and Mexico," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 689, Department of Economics and Business, Universitat Pompeu Fabra.
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
- N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
- F18 - International Economics - - Trade - - - Trade and Environment
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- M. del Mar Rubio Varas, 2005. "Value and depreciation of mineral resources over the very long run: An empirical contrast of different methods," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 867, Department of Economics and Business, Universitat Pompeu Fabra.
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