Article Contentsp. 119p. 120p. 121p. 122p. 123p. 124p. 125p. 126p. 127p. 128p. 129p. 130p. 131p. 132p. 133p. 134p. 135p. 136p. 137p. 138Issue Table of ContentsAmerican Economic Review, Vol. 88, No. 1, Mar., 1998Volume InformationFront MatterA Vision of the Growth Process [pp. 1 - 32]Competition between Private and Public Schools, Vouchers, and Peer-Group Effects [pp. 33 - 62]The Social Selection of Flexible and Rigid Agents [pp. 63 - 82]Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates [pp. 83 - 95]Endogenously Chosen Boards of Directors and Their Monitoring of the CEO [pp. 96 - 118]The Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use [pp. 119 - 138]Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis [pp. 139 - 156]Altruists, Egoists, and Hooligans in a Local Interaction Model [pp. 157 - 179]When Does It Take a Nixon to Go to China? [pp. 180 - 197]What Price Coordination? The Efficiency-Enhancing Effect of Auctioning the Right to Play [pp. 198 - 225]The International Ramifications of Tax Reforms: Supply-Side Economics in a Global Economy [pp. 226 - 245]Currencies and the Allocation of Risk: The Welfare Effects of a Monetary Union [pp. 246 - 259]The Ultimate Externality [pp. 260 - 265]The Impact of Educational Standards on the Level and Distribution of Earnings [pp. 266 - 275]Competition over More than One Prize [pp. 276 - 289]Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises [pp. 290 - 306]Sunk Costs and Firm Value Variability: Theory and Evidence [pp. 307 - 313]Measuring Consumer Surplus with Unknown Hicksian Demands [pp. 314 - 322]Back Matter [pp. i - xviii]http://www.jstor.orgThe Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource UseAuthor(s): James A. Brander and M. Scott TaylorSource: The American Economic Review, Vol. 88, No. 1, (Mar., 1998), pp. 119-138Published by: American Economic AssociationStable URL: http://www.jstor.org/stable/116821Accessed: 05/08/2008 16:17Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available athttp://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unlessyou have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and youmay use content in the JSTOR archive only for your personal, non-commercial use.Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained athttp://www.jstor.org/action/showPublisher?publisherCode=aea.Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printedpage of such transmission.JSTOR is a not-for-profit organization founded in 1995 to build trusted digital archives for scholarship. We work with thescholarly community to preserve their work and the materials they rely upon, and to build a common research platform thatpromotes the discovery and use of these resources. For more information about JSTOR, please contact [email protected] Simple Economics of Easter Island: A Ricardo-Malthus Model of Renewable Resource Use By JAMES A. BRANDER AND M. ScoTr TAYLOR * This paper presents a general equilibrium model of renewable resource and population dynamics related to the Lotka-Volterra predator-prey model, with man as the predator and the resource base as the prey. We apply the model to the rise and fall of Easter Island, showing that plausible parameter values gen- erate a 'feast and famine" pattern of cyclical adjustment in population and resource stocks. Near-monotonic adjustment arises for higher values of a re- source regeneration parameter, as might apply elsewhere in Polynesia. We also describe other civilizations that might have declined because of population over- shooting and endogenous resource degradation. (JEL Q20, N57, J1O) The world of the late twentieth century is much more heavily populated and has much higher average living standards than any pre- vious period in human history. However, widely publicized concerns have been ex- pressed over whether per capita real income can continue to increase or even be maintained at current levels in the face of rapid population growth and environmental degradation. Econ- omists normally tend to be skeptical about such claims, largely on the basis of the histor- ical record. At various times in the past, people have worried about overpopulation and envi- ronmental degradation, yet the past, at least as we imagine it, seems to provide a record of impressive progress in living standards. The application of modem science to ar- chaeological and anthropological evidence is, however, producing interesting new informa- tion on the role of natural resource degrada- tion. Specifically, a pattern of economic and population growth, resource degradation, and subsequent economic decline appears more common than previously thought. A major question of present-day resource management is whether the world as a whole, or some por- tion of it, might be on a trajectory of this type. A first step in addressing such concerns is to construct a formal model linking population dynamics and renewable resource dynamics. The primary objective of this paper is to construct such a model. The second objective is to apply this model to the very interesting case of Easter Island which, until recently, has been one of the world's great anthropological mysteries. Our model contains three central components. The first component is Malthu- sian population dynamics, following Thomas R. Malthus (1798). Malthus argued that in- creases in real income arising from productiv- ity improvements (or other sources) would tend to cause population growth, leading to erosion and perhaps full dissipation of income gains. He also suggested that population growth might overshoot productivity gains, causing subsequent painful readjustment.' * Brander: Faculty of Commerce, University of British Columbia, 2053 Main Mall, Vancouver, British Columbia, Canada V6T 1Z2; Taylor: Department of Economics, Uni- versity of British Columbia, 997-1873 East Mall, Vancou- ver, British Columbia, Canada V6T IZI. We thank three anonymous referees for very helpful suggestions. We are also grateful to Bob Allen, Elhanan Helpman, Janis Jekabsons, Grant McCall,