Resource Depletion and Trade: Adding a Nonrenewable Resource to the Heckscher-Ohlin Model
This paper develops the intertemporal equilibrium of a small open economy with a nonrenewable resource intensive export and a labor intensive import. Optimal depletion implies the resource price rises at the rate of the capital return. Capital grows with investment and labor at a steady rate, raising the issue of whether depletion necessarily diminishes. Effects of a depletion tax, import tariff, and export subsidy are examined. Simulations with Cobb-Douglas production functions illustrate model properties. The paper also considers a constant depletion rate, tragedy of the commons, and myopic resource owner.
|Date of creation:||Aug 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (334) 844-4910
Fax: (334) 844-4615
Web page: http://cla.auburn.edu/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:abn:wpaper:auwp2013-13. 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: (Hyeongwoo Kim)
If references are entirely missing, you can add them using this form.