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The dynamic eects of trade liberalization and environmental policy harmonization (2002)
| Content Provider | CiteSeerX |
|---|---|
| Author | Karp, Larry Zhao, Jinhua |
| Abstract | We study a general equilibrium model in which trade is driven by institutional dierences (dierences in environmental distortions) and diering factor endowments (dierences in production-related environmental stocks). The endogenous evolution of environmental stocks depends on the trade regime and on the extent of environmental distortions in the two coun-tries. The economy can have multiple steady states that depend on the policy regime and the initial stock levels. We investigate the eects of harmonization of the distortions and of trade liberalization, in the short and the long-run. The model illustrates the am-biguous eects of these reforms, and it explains why the predictions of environmentalists or economists are more likely to be born out, depending upon whether the environment is fragile or resilient. Key words: trade versus the environment; policy harmonization; multiple equilibria. JEL: F10, Q20 1 |
| File Format | |
| Publisher Date | 2002-01-01 |
| Access Restriction | Open |
| Content Type | Text |
