Optimal Multi-Regional Patterns of Economic Development and Material Resource Use
Marco A. Janssen () and
Jeroen van den Bergh
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Marco A. Janssen: Vrije Universiteit Amsterdam
No 00-012/3, Tinbergen Institute Discussion Papers from Tinbergen Institute
Regional economic activities require materials that can be extracteddomestically or imported from other regions. Analysis of optimalpatterns ofcombined economic development and materials use should be discussedinrelation to trade and the environment. A model is presented thatoptimiseslong-term welfare of a 2-region economic system with trade in virginandrecycled materials as well as consumer goods. The only differencebetween theregions concerns the size of their domestic materials resources.Numericaloptimisation experiments show that trade of resources and goodsincreases thecarrying capacity of the regions and their levels of welfare.Furthermore,regions are shown to specialise in certain economic sectors.
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