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Trade and Migration with Renewable Natural Resources: Out-of-Steady-State Dynamics


  • López, Ramón

    () (University of Maryland at College Park)

  • Schiff, Maurice

    () (World Bank)


Commodity price increases associated with the entry of China, India and other countries into the world economy has led to increased pressure on common-property renewable natural resources (NR). The problem is particularly worrisome for economies that obtain a large share of their income from the exploitation of NR in the production of an exportable commodity. This paper contributes to the analysis by examining the issue in the framework of a general equilibrium dynamic model and by solving for both the steady state and the transition dynamics. We show that i) a resource-rich, capital-poor economy is more likely to be subject to a "natural resource curse" and complete (irreversible) NR depletion; ii) the latter's likelihood rises with the relative commodity price and labor inflow; iii) a labor inflow under internal equilibrium results in a higher steady-state capital-labor ratio and manufacturing output, and unchanged NR and commodity output; iv) import and export taxes result in a larger steady-state NR and commodity output and a smaller capital stock and manufacturing output, and may prevent complete NR depletion; and v) the latter may also be prevented through capital inflows (foreign aid) and labor outflow (openness by the North), improved regulation, technical change and a production tax.

Suggested Citation

  • López, Ramón & Schiff, Maurice, 2010. "Trade and Migration with Renewable Natural Resources: Out-of-Steady-State Dynamics," IZA Discussion Papers 4923, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4923

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    References listed on IDEAS

    1. Joachim Merz & Tim Rathjen, 2014. "Time And Income Poverty: An Interdependent Multidimensional Poverty Approach With German Time Use Diary Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(3), pages 450-479, September.
    2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    3. Alkire, Sabina & Foster, James, 2011. "Counting and multidimensional poverty measurement," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 476-487, August.
    4. Alkire, Sabina, 2002. "Dimensions of Human Development," World Development, Elsevier, vol. 30(2), pages 181-205, February.
    5. Böhnke, Petra & Delhey, Jan, 1999. "Poverty in a multidimensional perspective: Great Britain and Germany in comparison," Discussion Papers, Research Unit: Social Structure and Social Reporting FS III 99-413, Social Science Research Center Berlin (WZB).
    6. repec:spr:esisew:978-0-387-75875-6 is not listed on IDEAS
    7. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 25-49, April.
    8. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    9. SOEP Group, 2001. "The German Socio-Economic Panel (GSOEP) after More than 15 Years: Overview," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(1), pages 7-14.
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    More about this item


    steady state; transition dynamics; depletion; renewable natural resources; trade; migration; capital flows;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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