Differential games approach to trade with exhaustible resources

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Differential games approach to trade with exhaustible resources

Discussion paper / Internet publication

ID	4266088
Author(s)	Tamasiga, Phemelo; Bondarev, Anton
Author(s) at UniBasel	Bondarev, Anton
Year	2014
Month and day	12-14
Title	Differential games approach to trade with exhaustible resources
Series title	WWZ Discussion Papers
Volume	2014
Number	14
Pages	34
Publisher / Institution	WWZ, University of Basel
Keywords	structural change, resource economics, international trade, differential games
Abstract	The paper presents a model of world economy with two countries where one of them dubbed home sells the exhaustible resource to final producers in both countries, which compete at the final goods market. The interaction between final producers is reached via the sticky price mechanics, whereas price continuously adjusts to produced final product quantities. Production technology in both countries includes the resource as an essential input plus the variety of intermediate products. We demonstrate how opening up to trade of the exhaustible resource may be beneficial for the home economy by promoting technical change and capital accumulation via increased resource rents and relative factor prices movements. This leads to the increase in social welfare due to taste for variety and fosters structural change in the home country.
edoc-URL	https://edoc.unibas.ch/61332/
Full Text on edoc	Available

04/05/2024

Research Database / FORSCHUNGSDATENBANK