NORTH-SOUTH ENVIRONMENTAL DEBATE: STRATEGIC PRICE DISTORTIONS AND CAPITAL FLOWS

Authors

  • Roberto Burguet Institute for Economic Analysis, Universitat Autónoma de Barcelona
  • Jaume Sempere Centro de Estudios Económicos, El Colegio de México, A. C.

DOI:

https://doi.org/10.21919/remef.v2i1.144

Keywords:

Environmental regulations, North and South economies

Abstract

In our model, Northern governments have an incentive to set weak environmental regulations in order to increase domestic productivity and, thereafter, to increase the price of their capital exports. We investigate the effect of this distortion on the incentives for environmental protection in the South. Under reasonable assumptions, the South responds by lowering environmental protection. Thus, strategic price distortions lead to a globally dirtier environment.

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How to Cite

Burguet, R., & Sempere, J. (2017). NORTH-SOUTH ENVIRONMENTAL DEBATE: STRATEGIC PRICE DISTORTIONS AND CAPITAL FLOWS. Revista Mexicana De Economía Y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), 2(1). https://doi.org/10.21919/remef.v2i1.144

Issue

Vol. 2 No. 1: Marzo

Section

Artículos