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International Trade Between Consumer and Conservationist Countries

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  • James Brander
  • M. Scott Taylor

Abstract

We consider trade between a consumer' country with an open access renewable resource and a conservationist' country that regulates resource harvesting to maximize domestic steady-state utility. In what we call the mild overuse' case, the consumer country exports the resource good and suffers steady-state losses from trade, as suggested by the conventional wisdom' that weak resource management standards confer a competitive advantage on domestic firms in the resource sector but cause welfare losses. Strikingly, however, when the resource stock is most in jeopardy, the conservationist country exports the resource good in steady state and both countries experience gains from trade.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6006.

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Date of creation: Apr 1997
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Publication status: published as Resource and Energy Economics, Vol. 19 (May 1997): 321-344.
Handle: RePEc:nbr:nberwo:6006

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  1. James A. Brander & M. Scott Taylor, 1997. "International Trade and Open-Access Renewable Resources: The Small Open Economy Case," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 30(3), pages 526-52, August.
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