Sustainability in Closed and Open Economies
REVIEW OF INTERNATIONAL ECONOMICS
Posted: 20 Dec 1996
This paper discusses unilateral sustainability policies for tradable resources in closed and open economies. The effects of sustainability policies are modelled in an intertemporal, competitive framework by applying different sustainabilityrules which are introduced unilaterally in the domestic country. The paper shows that no sustainability rule will lead to a slower rate of extraction of the resource. Unilateral policies will lead to an "import of sustainability". It is also shown that the foreign country may well gain in terms of consumption and real income from such unilateral sustainability policies but not in terms of sustainability.
JEL Classification: F20, Q20
Suggested Citation: Suggested Citation