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Free trade may save a renewable resource from exhaustion

Author

Listed:
  • Akihiho Yanase

    (Tohoku University)

Abstract

This study considers a small open economy in which two tradable final goods are produced by using a non-tradable resource good, which has an open-access property, as an input as well as a primary factor. If the intrinsic growth rate of the resource is relatively low, there may be no non-trivial steady state or multiple steady states. This implies that, by opening international trade, the economy can escape from the risk of complete depletion of the resource.

Suggested Citation

  • Akihiho Yanase, 2013. "Free trade may save a renewable resource from exhaustion," Economics Bulletin, AccessEcon, vol. 33(1), pages 226-233.
    • Handle: RePEc:ebl:ecbull:eb-12-00783
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I1-P22.pdf
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    References listed on IDEAS

    as
    1. Karp, Larry & Sacheti, Sandeep & Zhao, Jinhua, 2001. "Common Ground between Free-Traders and Environmentalists," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(3), pages 617-647, August.
    2. Naoto Jinji, 2007. "International trade and renewable resources under asymmetries of resource abundance and resource management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(4), pages 621-642, August.
    3. Brander, James A. & Scott Taylor, M., 1998. "Open access renewable resources: Trade and trade policy in a two-country model," Journal of International Economics, Elsevier, vol. 44(2), pages 181-209, April.
    4. Akihiko Yanase & Weijia Dong, 2011. "Open-Access Renewable Resources as Inputs and International Trade: A Small Open Economy," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 18(3), pages 263-285.
    5. 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.
    6. Brander, James A. & Scott Taylor, M., 1997. "International trade between consumer and conservationist countries," Resource and Energy Economics, Elsevier, vol. 19(4), pages 267-297, November.
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    10. TAKARADA Yasuhiro, 2009. "Transboundary Renewable Resource and International Trade," Discussion papers 09041, Research Institute of Economy, Trade and Industry (RIETI).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    International trade; Open-access renewable resources; Intermediate good; Multiple steady states; Resource depletion;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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