LAUSR

We develop a theoretical model that provides an additional explanation for the forest transition based on a trade liberalization scenario. We introduce a renewable natural resource (wood), used as an input by manufacturing firms, in a framework with economic geography foundations: transport costs affect the spatial distribution of firms. In a general equilibrium, the results reproduce the forest transition at a global scale: a decrease in transport costs has an initial negative effect on the worldwide stock of the natural resource, but this effect is offset over time as a consequence of industrial reallocation and eventually disappears in the long run.