NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

James A. Brander, M. Scott Taylor

NBER Working Paper No. 5474
Issued in March 1996
NBER Program(s):   ITI

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.

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Document Object Identifier (DOI): 10.3386/w5474

Published: Journal of International Economics, Vol. 44, no. 2 (April 1998): 181-210. citation courtesy of

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