Interactive dynamics between natural and man-made assets: The impact of external shocks
This paper studies a two-sector economy in which one of the sectors (the “commodity sector”) depends in part on the exploitation of a renewable natural resource and examines the issue in an economy-wide context where both natural resources and a man-made asset change endogenously over time. We show that under an open access resource regime: i) a resource-rich, capital-poor economy may experience a “natural resource curse” phase and under certain conditions, may even follow a non-sustainable path leading to complete natural resource depletion; ii) a labor inflow results in a higher steady-state per capita income, with unchanged natural resources, though it makes the economy more prone to reach a path that converges to resource collapse; iii) the introduction of a small import tariff or export tax results in larger steady-state natural resources and commodity output and renders the economy less vulnerable to resource collapse. We also contrast the open access case with the other polar case of perfect property rights, showing that in this case the economy experiences neither a resource curse nor a resource collapse.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Frankel, Jeffrey, 2010.
"The Natural Resource Curse: A Survey,"
Working Paper Series
rwp10-005, Harvard University, John F. Kennedy School of Government.
- 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.
- Lopez, Ramon, 1997. "Environmental externalities in traditional agriculture and the impact of trade liberalization: the case of Ghana," Journal of Development Economics, Elsevier, vol. 53(1), pages 17-39, June.
- Brian R. Copeland & M. Scott Taylor, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 109(3), pages 755-787.
- Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
- Larson, Donald F. & Nash, John, 2010. "Resource management and the effects of trade on vulnerable places and people : lessons from six case studies," Policy Research Working Paper Series 5258, The World Bank.
- Smulders, Sjak & van Soest, Daan & Withagen, Cees, 2004.
"International trade, species diversity, and habitat conservation,"
Journal of Environmental Economics and Management,
Elsevier, vol. 48(2), pages 891-910, September.
- Smulders, J.A. & van Soest, D.P. & Withagen, C.A.A.M., 2004. "International trade, species diversity and habitat conservation," Other publications TiSEM 806c53bc-ccb6-4c9a-b301-c, Tilburg University, School of Economics and Management.
- Brander, James A & Taylor, M Scott, 1998. "The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use," American Economic Review, American Economic Association, vol. 88(1), pages 119-38, March.
- Jagdish Bhagwati & Arvind Panagariya & T. N. Srinivasan, 1998. "Lectures on International Trade, 2nd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522470, March.
- David, DE LA CROIX & Davide, DOTTORI, 2007.
"Easter Island’s Collapse : A Tale of a Population Race,"
Discussion Papers (ECON - Département des Sciences Economiques)
2007005, Université catholique de Louvain, Département des Sciences Economiques.
- David Croix & Davide Dottori, 2008. "Easter Island’s collapse: a tale of a population race," Journal of Economic Growth, Springer, vol. 13(1), pages 27-55, March.
- DE LA CROIX, David & DOTTORI, Davide, 2007. "Easter Island’s collapse: A tale of a population race," CORE Discussion Papers 2007001, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- DE LA CROIX, David & DOTTORI, Davide, . "Easter Island's collapse: a tale of a population race," CORE Discussion Papers RP 2062, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- W. E. Diewert, 1981. "The Elasticity of Derived Net Supply and a Generalized Le Chatelier Principle," Review of Economic Studies, Oxford University Press, vol. 48(1), pages 63-80.
- Edward B. Barbier, 2005. "Natural Resource-Based Economic Development in History," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 103-152, July.
- Joseph E. Stiglitz, 1991. "The Invisible Hand and Modern Welfare Economics," NBER Working Papers 3641, National Bureau of Economic Research, Inc.
- Cooper, Russel J & McLaren, Keith R, 1980. "Atemporal, Temporal and Intertemporal Duality in Consumer Theory," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(3), pages 599-609, October.
- H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124.
- Reuveny, Rafael & Decker, Christopher S., 2000. "Easter Island: historical anecdote or warning for the future?," Ecological Economics, Elsevier, vol. 35(2), pages 271-287, November.
- Chichilnisky, Graciela, 1994. "North-South Trade and the Global Environment," American Economic Review, American Economic Association, vol. 84(4), pages 851-74, September.
- Anthony Scott, 1955. "The Fishery: The Objectives of Sole Ownership," Journal of Political Economy, University of Chicago Press, vol. 63, pages 116.
When requesting a correction, please mention this item's handle: RePEc:eee:deveco:v:104:y:2013:i:c:p:1-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.