Policy Rules for Exploitation of Renewable Resources: A Macroeconomic Perspective

Tryggvi Herbertsson () and Anders Sørensen

No 96-14, EPRU Working Paper Series from Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics

Abstract: A fundamental problem for an economy based on a common property resource is the absence of a market to trade the resource. This implies that private costs are below social costs. This paper investigates possible government interventions that correct for such distortions in a neoclassical growth model with a production externality in harvesting. The model predicts that the welfare of the representative householdsThe policy that replicates the command optimum is highly complex and changes over time. On the other hand, a large share of the maximum welfare indrease is internalized by introducing a constant quantity tax, suggesting that the potential of such policies is high.

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Journal Article: Policy Rules for Exploitation of Renewable Resources: A Macroeconomic Perspective (1998)
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