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Growth, Wealth Accumulation and Environmental Change in Portfolio Choice and Trade

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

The main purpose of this paper is to study global economic growth against national capital accumulation and environmental change in conditions of free international trade. The paper addresses issues related to changes in inequalities of income, wealth and economic structures between countries. Another unique contribution is to include portfolio equilibrium along with physical wealth and other assets (such as gold and diamond) in the multi-country growth model. We develop a multi-country model of wealth and environment as endogenous variables, along with government intervention in environmental protection. Governments collect taxes from different sources of producers' outputs and consumers' income. We apply Zhang's alternative concept of disposable income and utility function to model behaviour of households. We build the dynamics of J-country world economy, the behaviour of which is described by differential equations. We simulate the movement of the 3-country global economy and carry out comparative dynamic analysis with regard to certain parameters.

Suggested Citation

  • Wei-Bin Zhang, 2020. "Growth, Wealth Accumulation and Environmental Change in Portfolio Choice and Trade," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 18(2), pages 197-216.
    • Handle: RePEc:seb:journl:v:18:y:2020:i:2:p:197-216
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    File URL: http://www.asecu.gr/Seeje/issue35/issue35-zhang.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Global Economic Growth; Trade; Transboundary Pollution; Gold; Portfolio Equilibrium; Inequalities Between Countries;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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