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This paper examines the effects of international trade and trade policy in a two-country, two-good model with an open-access renewable resource that is internationally shared. We show that both countries may still benefit from trade when they specialize in the production of their comparative advantage good, although the shared resource is reduced by trade. In addition, we demonstrate that the steady state utility of a resource-good importing country may be reduced by trade, even if it specializes in the production of a non-resource good. Import tariffs and export taxes on a resource good may increase or decrease the shared stock level depending on the production patterns in a trading steady state. The trade policy is likely to be Pareto-improving when the shared stock rises, while both countries may be made worse off by the trade policy when the shared stock falls.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe purpose of this paper is to examine the welfare effects of pollution abatement technology transfer in a two-good two-country model with transboundary pollution. In each country, one industry emits pollution as a joint product of output and the sum of domestic and cross-border pollution decreases productivity of the other industry. Then, we show that technology transfer can benefit the recipient country regardless of the level of crossborder pollution. Moreover, the donor country gains from technology transfer if all pollution is transboundary but it may harm the donor country without cross-border pollution. We demonstrate that the effects of technology transfer depend on the trade pattern as well as cross-border pollution.

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In this paper we present a model of tied aid to shed light on the dispute between Kemp and Kojima (1985) and Schweinberger (1990) and to complement their analyses. We show that if the households of the recipient country are not informed of the transfers at their consumption decision, they have an incentive to trade the purchased goods from their domestic production income whenever transfer paradoxes occur. We also demonstrate that when they are aware of the transfers and can trade the purchased goods from their production income, there are no transfer paradoxes under the normality condition of commodities. Copyright 2005 International Monetary Fund.