EconPapers    
Economics at your fingertips  
 

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

Ramon Lopez and Maurice Schiff

No 4923, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: renewable natural resources; depletion; transition dynamics; steady state; trade; migration; capital flows (search for similar items in EconPapers)
JEL-codes: F22 O13 O15 Q17 Q27 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2010-05
New Economics Papers: this item is included in nep-dge and nep-mig
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published - published in: Journal of Development Economics, 2013, 104, 1-15

Downloads: (external link)
https://docs.iza.org/dp4923.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp4923

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
library@iza.org

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte (hinte@iza.org).

 
Page updated 2025-02-11
Handle: RePEc:iza:izadps:dp4923