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Changes in the firms behavior after the opening of an allowance market

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Abstract

This paper focuses on the influence of the influence of the opening of a market of allowances, such as the European Union Emission Trading Scheme, on the general equilibrium of an economy. Assuming there existed an equilibrium before the opening of this new market, we describe the changes in the firms behavior which guarantee that an equilibrium can be reached in the enlarged economy. The existence of an equilibrium in this framework can then be interpreted as ensuring the economy has the capacity to undergo the opening of allowances without too important modifications in its organisation.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/CES2007/B07027.pdf
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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number b07027.

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Length: 28 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:mse:cesdoc:b07027

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Keywords: General equilibrium theory; existence of equilibrium; externalities; increasing returns; markets of allowances.;

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Cited by:
  1. Antoine Mandel, 2009. "Changes in the firms behavior after the opening of markets of allowances," Economic Theory, Springer, vol. 40(1), pages 1-25, July.
  2. repec:hal:cesptp:hal-00633355 is not listed on IDEAS

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