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Updated: Sep 2, 2025

Watershed Planning within a Quantitative Scenario Analysis Framework
Published on: July 24, 2016
Trade and Resource Sustainability with Asset Markets
Larry Karp1, Armon Rezai2,3
1Department of Agricultural and Resource Economics, University of California, Berkeley, Berkeley, USA.
Abstract:
Trade changes incentives to protect an open-access natural resource independently of its effect on the resource price. General equilibrium linkages cause resource policy to affect the price of privately owned assets regardless of whether they are used in the resource sector. In the closed economy, the asset market in our overlapping generations setting creates incentives for currently living agents to protect the natural resource. The interplay of the asset market and general equilibrium effects causes trade to reverse these incentives. Trade liberalization and the establishment of formal property rights are policy complements: the former makes the latter more important.
Supplementary Information:
The online version contains supplementary material available at 10.1007/s13235-021-00400-4.
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