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Transboundary Renewable Resource and International Trade

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  • TAKARADA Yasuhiro

Abstract

We develop a two-country, two-good model with a transboundary renewable resource. A transboundary renewable resource is an open-access resource that is shared by two countries. We characterize the autarkic steady state, then examine the patterns of trade and the post-trading steady-state utility levels. Although the resource stock is reduced by trade, both countries may still benefit from trade when they are specialized in production. We also show that the steady-state utility of a resource good importing country may be reduced by trade, even if it specializes in production of a non-resource good which we refer to as manufactures.

Suggested Citation

  • TAKARADA Yasuhiro, 2009. "Transboundary Renewable Resource and International Trade," Discussion papers 09041, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:09041
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    References listed on IDEAS

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    12. repec:wsi:igtrxx:v:06:y:2004:i:01:n:s021919890400006x is not listed on IDEAS
    13. Jon Vislie, 1987. "On the Optimal Management of Transboundary Renewable Resources: A Comment," Canadian Journal of Economics, Canadian Economics Association, vol. 20(4), pages 870-875, November.
    14. David Levhari & Leonard J. Mirman, 1980. "The Great Fish War: An Example Using a Dynamic Cournot-Nash Solution," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 322-334, Spring.
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