Environmental Policy, Population Dynamics and Agglomeration
Chris Elbers () and
The B.E. Journal of Economic Analysis & Policy, 2003, vol. 3, issue 2, 1-23
We present and discuss a simple model of international trade in agricultural and manufactured commodities. Production of the latter takes places under monopolistic competition, and causes pollution. We incorporate mobility of skilled labor, the input in the manufacturing sector. One of the main findings is that pollution and environmental policy tend to countervail clustering that would occur in their absence.
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