Environmental Preservation, Sectoral Unemployment, and Trade in Resources |
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| Authors: | Chi-Chur Chao Joe R Kerkvliet & Eden S H Yu |
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| Institution: | The Chinese University of Hong Kong, Shatin, Hong Kong, and Oregon State University, Corvallis, OR 97330, USA,;Oregon State University, Corvallis, OR 97330, USA,;The Chinese University of Hong Kong, Shatin, Hong Kong |
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| Abstract: | This paper develops a general equilibrium model to examine the optimal level of environmental preservation in terms of its costs and benefits for a closed as well as an open economy. The optimal preservation policy for a closed economy is to tax the general population and use the tax revenue to compensate affected workers. Furthermore, for a small open economy, free trade in resources can meet whatever shortage of domestic productive resources that may occur, thereby leading to a higher optimal level of environmental preservation. |
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