Abstract
This paper develops a dynamic model of North-South trade in which the environment plays an important role. Our model is based on Chichilnisky’s North-South model for the macroeconomic interaction between two regions of the world economy. The latter was introduced in a static context in [1]. We introduce dynamics in the original North-South model by allowing the endogenous accumulation of capital. As a second extension of [1], we introduce here a variable which represents the system of property rights on an environmental asset which is used as an input to production.’ This variable 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.
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References
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Abraham, R., Chichilnisky, G., Record, R. (1998). North-South Trade and the Dynamics of the Environment. In: Chichilnisky, G., Heal, G., Vercelli, A. (eds) Sustainability: Dynamics and Uncertainty. Fondazione Eni Enrico Mattei (FEEM) Series on Economics, Energy and Environment, vol 9. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-4892-4_4
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DOI: https://doi.org/10.1007/978-94-011-4892-4_4
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