Abstract
This paper analyses the role of international differences in factor endowments and rates of time preference in determining the pattern of trade and specialization when one of the factors of production is an exhaustible resource. The length of the period over which a country exports the resource is found to be directly related to the fraction of the world's resource stock under its control, while the relative endowments of the inexhaustible factor influence only the volume of trade. The direction of trade is determined by the rates of time preference with the more impatient country being the first to export the resource. Effects of trade on factor rewards are also examined.
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