Trade liberalization and forest transition. (1st August 2017)

• Record Type: Journal Article
• Authors: González‐Val, Rafael; Pueyo, Fernando
• Is Part Of: International journal of economic theory. Volume 13:Number 3(2017:Sep.)
• Page Start: 269
• Page End: 287
• Publication Date: 2017-08-01
• Subjects: forest transition -- natural resource -- industrial location -- trade liberalization; Economics -- Periodicals; 330.01
• DOI: 10.1111/ijet.12129
• Languages: English
• ISSNs: 1742-7355

Abstract

Abstract: 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.