Dynamic Externalities and Policy Coordination.
The paper introduces trade into dynamic models with externalities and capital accumulation, and evaluates the efficiency of the Cournot-Nash equilibrium. It considers mixed economies characterized by a blend of strategic and nonstrategic sectors. Also, there are two sources of interdependence: the existence of production externalities and the endogenous determination of market prices. It is shown that policy coordination is not needed when preferences are the same. In this case, the production externalities are internalized, so that an inefficient solution becomes the efficient integrated world equilibrium due to trade. Copyright 2000 by Blackwell Publishing Ltd.
Year of publication: |
2000
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Authors: | Datta, Manjira ; Mirman, Leonard J |
Published in: |
Review of International Economics. - Wiley Blackwell, ISSN 0965-7576. - Vol. 8.2000, 1, p. 44-59
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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