Economics at your fingertips  

Trade and migration with renewable natural resources: out-of-steady-state dynamics

Ramon Lopeza

No 5310, Policy Research Working Paper Series from The World Bank

Abstract: Commodity price increases associated with the entry of China, India, and other countries into the world economy have led to increased pressure on common-property renewable natural resources. The problem is particularly worrisome for economies that obtain a large share of their income from the exploitation of natural resources 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. The authors show that i) a resource-rich, capital-poor economy is more likely to be subject to a"natural resource curse"and complete (irreversible) depletion of natural resources; 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 natural resources and commodity output; iv) import and export taxes result in larger steady-state natural resources and commodity output and smaller capital stock and manufacturing output, and may prevent complete depletion of natural resources; and v) the latter may also be prevented through capital inflows (foreign aid), labor outflow ( liberalization of the North's immigration policy), improved regulation, technical change, and a production tax.

Keywords: Economic Theory&Research; Political Economy; Emerging Markets; Population Policies; Debt Markets (search for similar items in EconPapers)
Date: 2010-05-01
New Economics Papers: this item is included in nep-cwa, nep-mig and nep-res
References: Add references at CitEc

Downloads: (external link) ... ered/PDF/WPS5310.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:

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().

Page updated 2024-04-17
Handle: RePEc:wbk:wbrwps:5310