Evo, Pablo, Tony, Diego, and Sonny - general equilibrium analysis of the illegal drugs market
AbstractThis paper presents a general equilibrium model for the production,trafficking, and consumption of illegal drugs which endogenously determines relative prices and quantities. The model is calibrated to characterize the market for cocaine and is used to analyze the effects of three types of policies: making the illegal activities riskier, increasing the penalties for conducting illegal activities, and legalizing previously illegal activities. Assessing the effects of these policies using the powerful tool of a general equilibrium model provides illuminating (and in cases surprising) results.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 4565.
Date of creation: 01 Mar 2008
Date of revision:
Economic Theory&Research; Debt Markets; Markets and Market Access; Consumption; Currencies and Exchange Rates;
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- L. Leoncini & F. Rentocchini, 2010. "Counteracting cocaine production. An analysis based on a novel dataset," Working Papers 693, Dipartimento Scienze Economiche, Universita' di Bologna.
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