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Perspectives on Valuation of Biodiversity

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  • Suneetha M. S.

    (Visiting Researcher, MSE and Adj. Senior Research Fellow, United Nations University – Institute for the Advanced Study of Sustainability, Japan)

Abstract

Forward-looking RE models such as the popular New Keynesian (NK) model do not provide a unique prediction about how the model economy behaves. We need some mechanism that ensures determinacy. McCallum (2012) says it is not needed because models are learnable only with the determinate solution and so the NK model, once learnt in this way, will be determinate. We agree: the only learnable solution that has agents converge on the true NK model is the bubble-free one. But once they have converged they must then understand the model and its full solution therefore including the bubble. Hence the learnability criterion still fails to pick a unique RE solution in NK models.

Suggested Citation

  • Suneetha M. S., 2014. "Perspectives on Valuation of Biodiversity," Working Papers 2014-088, Madras School of Economics,Chennai,India.
  • Handle: RePEc:mad:wpaper:2014-088
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic valuation of biodiversity; stakeholder preferences; multistakeholder valuation; interdisciplinary approaches; biodiversity policy;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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