Trade liberalization and forest transition | Zendy

GonzálezVal Rafael | Zendy; Pueyo Fernando | Zendy

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Trade liberalization and forest transition

Author(s) -

GonzálezVal Rafael,

Pueyo Fernando

Publication year - 2017

Publication title -

international journal of economic theory

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.351

H-Index - 11

eISSN - 1742-7363

pISSN - 1742-7355

DOI - 10.1111/ijet.12129

Subject(s) - economics , natural resource economics , stock (firearms) , offset (computer science) , natural resource , liberalization , free trade , resource (disambiguation) , general equilibrium theory , international economics , microeconomics , ecology , geography , market economy , computer network , archaeology , computer science , biology , programming language

We develop a theoretical model that provides an additional explanation for the forest transition based on a trade liberalization scenario. We introduce a renewable natural resource (wood), used as an input by manufacturing firms, in a framework with economic geography foundations: transport costs affect the spatial distribution of firms. In a general equilibrium, the results reproduce the forest transition at a global scale: a decrease in transport costs has an initial negative effect on the worldwide stock of the natural resource, but this effect is offset over time as a consequence of industrial reallocation and eventually disappears in the long run.

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