Malthus [Malthus, Thomas, [1798] 1970. An Essay On The Principle Of Population. Penguin, New York.] believed that population growth will eventually lead to natural resource depletion, economic and social collapse and population decline. Brander and Taylor [Brander, James A., Taylor, M. Scott, 1998. The simple economics of Easter Island: a Ricardo-Malthus model of renewable resource use. American Economic Review 88, 119-138] use a predator-prey model with an assumption of an open access resource. They show that the collapse of Easter Island could be explained by a Malthusian trap combined with technical characteristics of the resources. They suggest that institutional change such as assignment of property rights could potentially have averted the collapse of Easter Island. In this paper, we show that even if the islanders had complete assignment of property rights and implemented optimal resource management with infinite horizon, or equivalently had a social planner that implemented such an optimal plan, as in neoclassical welfare economics, a similar boom-bust cycle would have occurred. (c) 2005 Elsevier B.V. All rights reserved.
