Policy Rules for Exploitation of Renewable Resources: A Macroeconomic Perspective
AbstractA fundamental problem for an economy based on a common property resource is the absence of a market to trade the resource. This implies that private costs will be below social costs. This paper investigates possible government interventions that correct for such distortions in a neoclassical growth model with a production externality in harvesting. The model predicts that the welfare of the representative household increases considerably when a Piguovian tax is implemented. The policy that replicates the command optimum is highly complex and changes over time. On the other hand, a large share of the maximum welfare increase is internalized by introducing a constant quantity tax, suggesting that the potential of such policies is high. Copyright Kluwer Academic Publishers 1998
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Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 12 (1998)
Issue (Month): 1 (July)
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Web page: http://www.springerlink.com/link.asp?id=100263
resource based growth; resource rent; problem of the commons;
Other versions of this item:
- Tryggvi Thor Herbertsson & Anders Sørensen, . "Policy Rules for Exploitation of Renewable Resources: A Macroeconomic Perspective," EPRU Working Paper Series 96-14, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
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