Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102051
Authors: 
Gars, Johan
Spiro, Daniel
Year of Publication: 
2014
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 13/2014
Abstract: 
Trade with differentiated goods normally provides a form of insurance against disasters, such as floods and fires, through an increasing relative price of goods from the afflicted country. With open access renewable resources this is reversed. A country hit by a negative shock recovers faster if trading with fewer countries and, if trading with many, shocks affecting also the trading partners are preferred over idiosyncratic shocks. Trade thus increases economic vulnerability to disasters and local disasters will be worse than global. Furthermore, world markets transmit shocks so a natural disaster in one country can cause man-made disasters in competitor countries. These results are particularly relevant for developing countries due to high renewable resource reliance, more problems of open access and more economic vulnerability to disasters. A calibration suggests these concerns may apply to around 60 percent of world fisheries and that around 20 percent risk collapsing following small idiosyncratic shocks.
Subjects: 
Open Access
Renewable Resource
Trade
Disaster
Variety
JEL: 
D62
F18
Q27
Q28
Document Type: 
Working Paper

Files in This Item:
File
Size
457.66 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.