Deforestation and Development in a Small Open Economy |
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Authors: | John M Hartwick Ngo Van Long Huilan Tian |
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Institution: | a Department of Economics, Queen's University, Kingston, Ontario, K7L 3N6, Canada;b McGill University, 855 Sherbrooke Street West, Montreal, Quebec, H3A 2T7, Canada |
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Abstract: | Our economy faces world prices and starts with a large endowment of land in forest and a small endowment of land in agriculture. Clearing of forested land yields marketable timber and a unit of land for agriculture. Early, the high price of agricultural land drives the clearing process. Later, the profit from marketing timber from the cleared land drives the process. Dates of “phase transitions” are endogenous. We also set out a submodel of perpetual cyclic clearing and reforesting, and show that it when cyclical harvesting—regrowing is optimal, the extent of clearing can be relatively large. |
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Keywords: | deforestation phases of land clearing perpetual cycle of clearing |
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