Abstract
This paper develops a small-open-economy model in which two final goods are produced by using a primary factor and a resource good, which has an open-access property and is produced from the primary factor. Under the assumption that only the final goods are tradable, the economy's patterns of specialization both in the temporary equilibrium and in the steady state are derived. It is shown that in the steady state, the economy either completely specializes in one good or diversifies production, depending on the labor endowment and the growth rate of the resource. The long-run effects of trade on the resource stock and national welfare are also examined.
Original language | English |
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Pages (from-to) | 263-285 |
Number of pages | 23 |
Journal | Asia-Pacific Journal of Accounting and Economics |
Volume | 18 |
Issue number | 3 |
DOIs | |
Publication status | Published - 2011 Dec |
Externally published | Yes |
Keywords
- Intermediate good
- International trade
- Open-access renewable resource
- Small open economy
ASJC Scopus subject areas
- Accounting
- Finance
- Economics and Econometrics