Open Access Renewable Resources: Trade and Trade Policy in a Two-CountryModel

James A. Brander and M. Scott Taylor ()

No 5474, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper develops a two-good, two-country model with national open access renewable resources. We derive an appropriate analog of `factor proportions' for the renewable resource case and link it to trade patterns and to the likelihood of diversified production. The resource importer gains from trade. However, a diversified resource exporting country necessarily suffers a decline in steady state utility resulting from trade, and may lose along the entire transition path. Thus the basic `gains from trade' presumption is substantially undermined by open access resources. Tariffs imposed by the resource importing country always benefit the resource exporter, and may be pareto-improving.

JEL-codes: F1 Q2 (search for similar items in EconPapers)
Date: 1996-03
Note: ITI
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Related works:
Working Paper: Open Acces Renewable Resources: Trade and Trade Policy in a Two-Country Model (1995)
Journal Article: Open access renewable resources: Trade and trade policy in a two-country model (1998)
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