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Specialization and Nonrenewable Resources: Ricardo Meets Ricardo Author info | Abstract | Publisher info | Download info | Related research | Statistics Ujjayant Chakravorty () (Department of Economics, Emory University)
Darrell Krulce (QUALLCOM, Inc., San Diego)
James Roumasset () (Department of Economics, University of Hawaii at Manoa)
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The one-demand Hotelling model fails to explain the observed specialization of nonrenewable resources. We develop a model with multiple demands and resources to show that specialization of resources according to demand is driven by Ricardian comparative advantage while the order of resource use over time is determined by Ricardian absolute advantage. An abundant resource with absolute advantage in all demands must be initially employed in all demands. When each resource has an absolute advantage in some demand, no resource may be used exclusively. The two-by-two model is characterized. Resource and demand-specific taxes are shown to have significant substitution effects.
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Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number
200401.
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Length: 52 pages
Date of creation: 2004Date of revision:
Publication status: Forthcoming in the Journal of Economic Control and DynamicsHandle: RePEc:hai:wpaper:200401Contact details of provider: Postal: 2424 Maile Way, Honolulu, HI 96822 Phone: (808)956-8730 Fax: (808)956-4347 Email: Web page: http://www.economics.hawaii.edu/ More information through EDIRC
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Keywords: Dynamic comparative advantage ; energy ; non-renewable resources ; multiple demands ; Hotelling ; Other versions of this item:
Find related papers by JEL classification: D9 - Microeconomics - - Intertemporal Choice and Growth Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
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Full
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[Downloadable!] (restricted) Eric Iksoon Im & Ujjayant Chakravorty & James Roumasset, 2004.
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Other versions:
Eric Iksoon Im & Ujjayant Chakravorty & James Roumasset, 2005.
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"Integrated management of multiple aquifers with subsurface flows and inter-district water transport ,"
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