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

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...

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Bibliographic Details
Main Authors:	López, Ramón, Schiff, Maurice
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	AGRICULTURE ALLOCATION ALLOCATION OF RESOURCES BANK OFFICE BENCHMARK BUDGET CONSTRAINT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL GAIN CAPITAL INFLOWS CAPITAL MARKETS CAPITAL STOCK CAPITAL STOCKS COMMODITIES COMMODITY COMMODITY EXPORT COMMODITY PRICE COMMODITY PRICES COMPETITIVE MARKETS CONSUMPTION EXPENDITURES COST OF CAPITAL COUNTRY OF ORIGIN DERIVATIVE DERIVATIVES DERIVED DEMAND DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMY DEVELOPMENT ECONOMICS DISCOUNT RATE DISCOUNTED VALUE DISEASES DISEQUILIBRIUM ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC THEORY ELASTICITY ENVIRONMENTAL DEGRADATION ENVIRONMENTAL EXTERNALITIES ENVIRONMENTAL IMPACT ENVIRONMENTAL RESOURCES ENVIRONMENTAL SUSTAINABILITY EQUATIONS EQUILIBRIUM EXPECTED RETURNS EXPENDITURE EXPORTS EXTERNALITY FERTILITY FULL EMPLOYMENT GROWTH RATE GROWTH RATES HOLDING HOME COUNTRY IMMIGRANTS IMMIGRATION IMMIGRATION POLICIES IMMIGRATION POLICY INCOME INSTITUTIONAL CONSTRAINT INSTITUTIONAL CONSTRAINTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL COMMUNITY INTERNATIONAL TRADE INVESTING KNOWLEDGE DEVELOPMENT KNOWLEDGE DIFFUSION LABOR FORCE LIBERALIZATION OF TRADE LOW-INCOME COUNTRIES MARGINAL COST MARGINAL UTILITY MARGINAL VALUE MARKET ACCESS MARKET PRICE MARKET SIZE MIGRATION MULTILATERAL ORGANIZATIONS NATIONAL INCOME NATURAL RESOURCE NATURAL RESOURCES NEGATIVE EXTERNALITIES NEGATIVE EXTERNALITY NUMBER OF WORKERS OPEN ECONOMY OPPORTUNITY COST OPTIMIZATION PARTIAL EQUILIBRIUM ANALYSIS PER CAPITA INCOME POLICY DIALOGUE POLICY RESEARCH POLICY RESEARCH WORKING PAPER POLITICAL ECONOMY POPULATION DYNAMICS POSITIVE PRODUCTION PRICE INCREASES PRODUCTION FUNCTIONS PRODUCTIVE ASSETS PROGRESS PROPERTY RIGHTS RATE OF GROWTH RATE OF RETURN RATE OF RETURN ON CAPITAL RATE OF RETURN TO CAPITAL REAL INCOME REGULATORY SYSTEMS REMITTANCES RESOURCE DEPLETION RESOURCE USE RESPECT RURAL AREAS SAVINGS STOCK OF CAPITAL TAX TAX REVENUES TOTAL FACTOR PRODUCTIVITY TOTAL OUTPUT TRADE BALANCE TRADE LIBERALIZATION TRADE POLICIES TRADE POLICY TRADE REGIME TRADE TAX TRADE TAXES UTILITY FUNCTION VALUE OF OUTPUT WATER RESOURCES WATER SUPPLIES WORLD ECONOMY WORLD MARKET WORLD TRADE
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100513165438 http://hdl.handle.net/10986/3795

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Summary:	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.

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

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