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International trade and the 'ecological balance of payments'

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The role that international trade plays in measuring sustainable development has come under recent scrutiny. We examine international resource flows using an input–output framework that is akin to ‘ecological balance of payments’ analysis. This framework allows us to use to calculate the derived demand for resources in the country of final use. The empirical section of this paper applies this model to data on global trade and natural resource depletion in 1980, 1985 and 1990. Our results provide a quantitative assessment of the significance of direct and indirect imports of resources required by Japan, the United States and the European Union. These results can also be disaggregated to permit an examination of trade relations vis-à-vis individual resource exporting countries. It is interesting to note that a number of these resource exporters appear to be unsustainable at least on the basis of the criterion that the savings rate net of asset consumption (i.e. genuine savings) should not be negative. These findings, in turn, could form the basis of policies to assist exporters in adopting prudent resource and public investment policies.

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