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      Trade, growth, and environmental quality

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      Author
      Sirakaya, S.
      Turnovsky, S.J.
      Alemdar, N.M.
      Date
      2009
      Source Title
      Review of International Economics
      Print ISSN
      0965-7576
      Volume
      17
      Issue
      5
      Pages
      906 - 926
      Language
      English
      Type
      Article
      Item Usage Stats
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      Abstract
      This paper examines linkages between international trade, environmental degradation, and economic growth in a dynamic North-South trade game. Using a neoclassical production function subject to an endogenously improving technology, North produces manufactured goods by employing labor, capital, and a natural resource that it imports from South. South extracts the resource using raw labor, in the process generating local pollution. We study optimal regional policies in the presence of local pollution and technology spillovers from North to South under both non-cooperative and cooperative modes of trade. Non-cooperative trade is inefficient due to stock externalities. Cooperative trade policies are efficient and yet do not benefit North. Both regions gain from improved productivity in North and faster knowledge diffusion to South regardless of the trading regime. © 2009 The Authors. Journal compilation © 2009 Blackwell Publishing Ltd.
      Keywords
      economic growth
      environmental degradation
      environmental quality
      international trade
      knowledge
      neoclassical theory
      North-South relations
      pollutant source
      pollution policy
      spillover effect
      theoretical study
      trade performance
      trade-environment relations
      Permalink
      http://hdl.handle.net/11693/22564
      Published Version (Please cite this version)
      http://dx.doi.org/10.1111/j.1467-9396.2008.00800.x
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      • Department of Economics 663
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