ITQs, Firm Dynamics and Wealth Distribution: Does full tradability increase inequality?

Jose Maria Da Rocha Alvarez and Jaume Sempere

MPRA Paper from University Library of Munich, Germany

Abstract: Concerns over the distributive effects of ITQ’s lead to restrictions on their tradability. We consider a general equilibrium model with firm dynamics. In contrast with the standard framework, the distribution of firms is not exogenous, but is instead determined endogenously by entry/exit decisions made by firms. We show that the stationary wealth distribution depends on whether the ITQs are fully tradable or not. We calibrate our model to match the observed increase in revenue inequality in the Northeast Multispecies (ground-fish) U.S. Fishery. We show that although observed revenue inequality increases, wealth inequality is reduced by 40%.

Keywords: ITQ; wealth distribution; firm dynamics; inequality; permit markets (search for similar items in EconPapers)
JEL-codes: D6 Q58 (search for similar items in EconPapers)
Date: 2015-08-13
New Economics Papers: this item is included in nep-bec and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: ITQs, Firm Dynamics and Wealth Distribution: Does Full Tradability Increase Inequality? (2017)
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