Daniel Spiro

Trade and the Risk of Renewable-Resource Collapse

Does international trade increase the risk of renewable-resource collapse? In a recent paper, Daniel Spiro, together with Johan Gars, shows that the answer is affirmative if trade increases the variety of goods and the resource is harvested under open access. Then there is increased likelihood of collapse both as a steady-state outcome and following shocks to the stock. Two separate mechanisms underlie the results. 1) Trade gives resource harvesters access to new varieties of goods. To enable buying these goods, they exert more harvesting effort. 2) The resource constitutes a new variety for other countries, implying that the resource price increases with trade openness, especially when the stock is small, which makes the resource “exclusive”. Unlike in the existing literature, which predicts that trade cannot lead to collapse, each of the researchers’ two mechanisms can cause collapse and they both increase the vulnerability to shocks. Several examples of collapses are presented that can plausibly be attributed to each of the mechanisms.

Mr Spiro works mainly on resource and environmental economics, political economics and behavioural economics. Within resource and environmental economics, he is interested in understanding the interaction between market and political processes and how they affect each other. Within political economics he is working on ideological extremism and integration and whether and when groups of different ideologies start conflicts. In behavioural economics he is working on social norms, pro-social behaviour and bounded rationality.

Daniel Spiro is Associate Professor in Economics at Uppsala University, with an affiliation also at Oslo Business School. He has previously worked at the University of Oslo. His PhD and BA in Economics are from Stockholm University. He also holds an MA in engineering from the Royal Institute of Technology, Stockholm.