Paper #689

Títol:

The capital gains from trade are not enough: Evidence from the environmental accounts of Venezuela and Mexico

Autor:

M. del Mar Rubio

Data:

Maig 2003

Resum:

In principle, a country can not endure negative genuine savings for long periods of time without experiencing declining consumption. Nevertheless, theoreticians envisage two alternatives to explain how an exporter of non-renewable natural resources could experience permanent negative genuine savings and still ensure sustainability. The first one alleges that the capital gains arising from the expected improvement in the terms of trade would suffice to compensate for the negative savings of the resource exporter. The second alternative points at technological change as a way to avoid economic collapse. This paper uses the data of Venezuela and Mexico to empirically test the first of these two hypotheses. The results presented here prove that the terms of trade do not suffice to compensate the depletion of oil reserves in these two open economies.

Paraules clau:

Exhaustive resources, environmental accounts, net national product, genuine savings, foreign trade

Codis JEL:

Q01, N5, P24, F18

Àrea de Recerca:

Macroeconomia i Economia Internacional

Publicat a:

Journal of Environmental Economics and Management, 48, 3, (2004), pp. 1175-1191

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