North-South trade and the dynamics of the environment, Chapter 2.2
This paper develops a dynamic model of North-South trade in which environment plays an important role. Our model is based on Chichilnisky North-South model for the macroeconomic interaction between two sectors of the world economy. The latter was introduced in a static context. We introduce dynamics in the original North-South model by allowing endogenous accumulation of capital. As a second extension of , we introduce here a variable which represents the system of property rights on the environmental asset which is used as an input to production. This could represent, for example, the property rights on forests from which wood is extracted to be used as an input to the production of traded goods or the property rights on water which is similarly used, perhaps for agricultural goods for export. The paper explains mathematically and through simulations the dynamics of a two-region world. There are two produced goods and two inputs to production. We show that as we vary the property rights of the environment the dynamics of the system changes. The less well defined are the property rights, the more chaotic are the model's dynamics.
|Date of creation:||1998|
|Date of revision:|
|Publication status:||Published in Sustainability: Dynamics and Uncertainty (1998): pp. 77-108|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
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- Graciela Chichilnisky & Geoffrey Heal, 1993. "Global Environmental Risks," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 65-86, Fall.
- Chichilnisky, G., 1993.
"North-South Trade and the Dynamics of Renewable Resources,"
93-15, Columbia - Graduate School of Business.
- Chichilnisky, Graciela, 1993. "North-South trade and the dynamics of renewable resources," Structural Change and Economic Dynamics, Elsevier, vol. 4(2), pages 219-248, December.
- Chichilnisky, Graciela, 1986. "A general equilibrium theory of North-South trade," MPRA Paper 8810, University Library of Munich, Germany.
- Chichilnisky,Graciela & Heal,Geoffrey M., 2005.
"The Evolving International Economy,"
Cambridge University Press, number 9780521310017, September.
- Chichilnisky, Graciela, 1985. "International trade in resources: a general equilibrium analysis," MPRA Paper 8356, University Library of Munich, Germany.
- Chichilnisky, Graciela, 1981. "Terms of trade and domestic distribution : Export-led growth with abundant labour," Journal of Development Economics, Elsevier, vol. 8(2), pages 163-192, April.
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