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Karp, L. & Rezai, A. (2021). Trade and Resource Sustainability with Asset Markets. Dynamic Games and Applications 10.1007/s13235-021-00400-4.
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Abstract
Trade changes incentives to protect an open-access natural resource independently of its effect on the resource price. General equilibrium linkages cause resource policy to affect the price of privately owned assets regardless of whether they are used in the resource sector. In the closed economy, the asset market in our overlapping generations setting creates incentives for currently living agents to protect the natural resource. The interplay of the asset market and general equilibrium effects causes trade to reverse these incentives. Trade liberalization and the establishment of formal property rights are policy complements: the former makes the latter more important.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | Asset pricing; Endogenous property rights; Markov perfection; Open-access resource; Overlapping generations; Policy complements; Sequential game; Trade |
| Research Programs: | Advancing Systems Analysis (ASA) Advancing Systems Analysis (ASA) > Systemic Risk and Resilience (SYRR) Population and Just Societies (POPJUS) Population and Just Societies (POPJUS) > Equity and Justice (EQU) |
| Depositing User: | Luke Kirwan |
| Date Deposited: | 12 Nov 2021 07:41 |
| Last Modified: | 12 Nov 2021 07:41 |
| URI: | https://pure.iiasa.ac.at/17639 |
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