Advanced Search
MyIDEAS: Login to save this paper or follow this series

Deforestation and the Real Exchange Rate

Contents:

Author Info

  • Jean-Louis ARCAND

    ()
    (Institut des Hautes Etudes Internationales et du Développement)

  • Sylviane GUILLAUMONT JEANNENEY

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

  • Patrick GUILLAUMONT

    ()
    (Centre d'Etudes et de Recherches sur le Développement International)

Abstract

Deforestation is a phenomenon that has largely been concentrated in the developing world. We construct a theoretical model of deforestation that focuses on the factors affecting the incentives to transform forested land into agricultural land. We show that: (i) lower discount rates (associated with higher income levels), stronger institutions, and increases in the relative price of timber decrease deforestation; (ii) depreciations in the real exchange rate increase deforestation in developing countries whereas the opposite obtains in developed countries; (iii) paradoxically, better institutions exacerbate the deleterious impact of depreciations in developing countries. These hypotheses are tested on an annual sample of 122 countries over the 1963-1994 period, and are not rejected by the data. Our results suggest that short-term macroeconomic policy, institutional factors, and the interaction between the two, are potentially important determinants of environmental outcomes.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://publi.cerdi.org/ed/2003/2003.32.pdf
Download Restriction: no

Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200332.

as in new window
Length: 38
Date of creation: 2003
Date of revision:
Publication status: Published in , 2002, pages
Handle: RePEc:cdi:wpaper:461

Contact details of provider:
Postal: 65 Bd. F. Mitterrand, 63000 Clermont-Ferrand
Phone: (33-4) 73 17 74 00
Fax: (33-4) 73 17 74 28
Web page: http://cerdi.org/
More information through EDIRC

Related research

Keywords: institutions.; real effective exchange rate; deforestation;

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers, Institute for Fiscal Studies W99/04, Institute for Fiscal Studies.
  2. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, Elsevier, vol. 68(1), pages 29-51, July.
  3. Farzin, Y Hossein, 1984. "The Effect of the Discount Rate on Depletion of Exhaustible Resources," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(5), pages 841-51, October.
  4. Robert T. Deacon & Henning Bohn, 2000. "Ownership Risk, Investment, and the Use of Natural Resources," American Economic Review, American Economic Association, American Economic Association, vol. 90(3), pages 526-549, June.
  5. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  6. Panayotou T, 1993. "Empirical tests and policy analysis of environmental degradation at different stages of economic development," ILO Working Papers, International Labour Organization 292778, International Labour Organization.
  7. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  8. Bhattarai, Madhusudan & Hammig, Michael, 2001. "Institutions and the Environmental Kuznets Curve for Deforestation: A Crosscountry Analysis for Latin America, Africa and Asia," World Development, Elsevier, Elsevier, vol. 29(6), pages 995-1010, June.
  9. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, Econometric Society, vol. 49(6), pages 1417-26, November.
  10. Rock, Michael T., 1996. "The stork, the plow, rural social structure and tropical deforestation in poor countries?," Ecological Economics, Elsevier, Elsevier, vol. 18(2), pages 113-131, August.
  11. Stephen Bond & Céline Nauges & Frank Windmeijer, 2002. "Unit Roots and Identification in Autoregressive Panel Data Models: A Comparison of Alternative Tests," 10th International Conference on Panel Data, Berlin, July 5-6, 2002, International Conferences on Panel Data C5-4, International Conferences on Panel Data.
  12. Andrew D. Foster & Mark R. Rosenzweig, 2003. "Economic Growth And The Rise Of Forests," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(2), pages 601-637, May.
  13. Perz, Stephen G., 2004. "Are Agricultural Production and Forest Conservation Compatible? Agricultural Diversity, Agricultural Incomes and Primary Forest Cover Among Small Farm Colonists in the Amazon," World Development, Elsevier, Elsevier, vol. 32(6), pages 957-977, June.
  14. Cropper, Maureen & Griffiths, Charles, 1994. "The Interaction of Population Growth and Environmental Quality," American Economic Review, American Economic Association, American Economic Association, vol. 84(2), pages 250-54, May.
  15. Bhattarai, Madhusudan & Hammig, Michael, 2004. "Governance, economic policy, and the environmental Kuznets curve for natural tropical forests," Environment and Development Economics, Cambridge University Press, Cambridge University Press, vol. 9(03), pages 367-382, July.
  16. Angelsen, Arild & Kaimowitz, David, 1999. "Rethinking the Causes of Deforestation: Lessons from Economic Models," World Bank Research Observer, World Bank Group, World Bank Group, vol. 14(1), pages 73-98, February.
  17. Sauer, Christine & Bohara, Alok K, 2001. "Exchange Rate Volatility and Exports: Regional Differences between Developing and Industrialized Countries," Review of International Economics, Wiley Blackwell, Wiley Blackwell, vol. 9(1), pages 133-52, February.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cdi:wpaper:461. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.