Endogenous Growth, Asymmetric Trade and Resource Taxation
Since 1980, the aggregate income of oil-exporting countries relative to that of oil- poor countries has been remarkably constant despite structural gaps in productivity growth rates. This stylized fact is analyzed in a two-country model where resource- poor (Home) and resource-rich (Foreign) economies display productivity differences but stable income shares due to terms-of-trade dynamics. We show that Home's income share is positively related to the national tax on domestic resource use, a prediction confirmed by dynamic panel estimations for sixteen oil-poor economies. National governments have incentives to deviate from both efficient and laissez-faire allocations. In Home, increasing the oil tax improves welfare through a rent-transfer mechanism. In Foreign, subsidies (taxes) on domestic oil use improve welfare if R&D productivity is lower (higher) than in Home.
|Date of creation:||Aug 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Zürichbergstrasse 18, ZUE, CH-8092 Zürich|
Phone: +41 44 632 03 87
Fax: +41 44 632 13 62
Web page: http://www.cer.ethz.ch
More information through EDIRC
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.:
- Daron Acemoglu & Jaume Ventura, 2001.
"The World Income Distribution,"
NBER Working Papers
8083, National Bureau of Economic Research, Inc.
- Bergstrom, Theodore C, 1982. "On Capturing Oil Rents with a National Excise Tax," American Economic Review, American Economic Association, vol. 72(1), pages 194-201, March.
- Sanjeev Gupta & Benedict J. Clements & Kevin Fletcher & Gabriela Inchauste, 2002. "Issues in Domestic Petroleum Pricing in Oil-Producing Countries," IMF Working Papers 02/140, International Monetary Fund.
- Luis A. Rivera-Batiz & Paul M. Romer, 1991.
"Economic Integration and Endogenous Growth,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 106(2), pages 531-555.
- Grimaud, André, 2009.
"Taxation of a Polluting Non-Renewable Resource in the Heterogeneous World,"
IDEI Working Papers
541, Institut d'Économie Industrielle (IDEI), Toulouse.
- Julien Daubanes & André Grimaud, 2010. "Taxation of a Polluting Non-renewable Resource in the Heterogeneous World," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 47(4), pages 567-588, December.
- DAUBANES Julien & GRIMAUD AndrÃ©, 2006. "On the North-South Effects of Environmental Policy: Rent Transfers, Relocation and Growth," LERNA Working Papers 06.26.219, LERNA, University of Toulouse.
- Grimaud, André, 2007. "On the North-South Effects of Environmental Policy: Rent Transfers, Relocation, Incentives to Research and Growth," IDEI Working Papers 477, Institut d'Économie Industrielle (IDEI), Toulouse.
- James Brander & Slobodan Djajic, 1982.
"Rent-Extracting Tariffs and the Management of Exhaustible Resources,"
468, Queen's University, Department of Economics.
- James Brander & Slobodan Djajic, 1983. "Rent-Extracting Tariffs and the Management of Exhaustible Resources," Canadian Journal of Economics, Canadian Economics Association, vol. 16(2), pages 288-98, May.
- van Geldrop, Jan H. & Withagen, Cees A. A. M., 1993. "General equilibrium and international trade with exhaustible resources," Journal of International Economics, Elsevier, vol. 34(3-4), pages 341-357, May.
- Kemp, Murray C & Suzuki, Hideo, 1975. "International Trade with a Wasting but Possibly Replenishable Resource," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(3), pages 712-32, October.
- Lederman, Daniel & Maloney, William F., 2003. "Trade structure and growth," Policy Research Working Paper Series 3025, The World Bank.
- Edward Barbier, 1999. "Endogenous Growth and Natural Resource Scarcity," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(1), pages 51-74, July.
- Pietro F. Peretto & Simone Valente, 2010. "Resource Wealth, Innovation and Growth in the Global Economy," CER-ETH Economics working paper series 10/124, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Christian Scholz & Georg Ziemes, 1999. "Exhaustible Resources, Monopolistic Competition, and Endogenous Growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(2), pages 169-185, March.
When requesting a correction, please mention this item's handle: RePEc:eth:wpswif:10-132. 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: ()
If references are entirely missing, you can add them using this form.