Resources Policy in an Endogenously Growing Economy
AbstractIn a decentralized open economy model with an endogenous growth sector and a renewable resource sector a steady state–balanced growth equilibrium will at best be attained by chance. An interior equilibrium where both sectors exist and the resource sector is in equilibrium while the other sector grows can be achieved by the help of government policy. The optimum equilibrium is unstable in the decentralized economy and active government policy is needed to enforce it. Apparently contradicting policies may be needed to first move the economy to the optimal equilibrium and then to keep it there. In the current model the resource good is exported in exchange for a foreign consumption good. Hence a tariff on imports will have the same qualitative effects as a harvest fee.
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Bibliographic InfoPaper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c009_034.
Length: 21 pages
Date of creation: Jun 2004
Date of revision:
Endogenous Growth; Renewable Resources; Resource taxation;
Find related papers by JEL classification:
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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