Return to search

Topics in international trade : the economic and environmental effect of capital liberalization in developing countries

This paper uses general equilibrium static and dynamic
models to examine the economic and environmental effect of
capital liberalization policy based on the general
equilibrium static and dynamic models. The first topic
develops a static general equilibrium model of a small open
economy in the presence of unemployment with three sectors:
a nontradeable sector, a tradeable sector, and an
environmental sector. In the second section, I use a dynamic
general equilibrium model of a small open economy in the
presence of unemployment with three sectors: an importable
sector, an exportable sector, and an environmental sector.
In the last section I analyze the environmental effect of a
developing country's capital liberalization policy when the
consumer values the environment.
The dynamic model, based on intertemporal
optimization, focuses on the role of how land development is
affected by foreign capital investment. The time-varying
dynamic policies, such as planned permanent and planned
gradual capital liberalization, are investigated to analyze
the dynamic path of land and foreign capital stock in the
short-run.
The major findings of this paper are described as
follows. In the long-run dynamic analysis, the production of
the environmental good in a developing country is reduced
when the developing country has a positive net income effect
due to further capital liberalization, if there is an
initial shortage of capital investment. The reduction of the
environmental good might have a significant welfare impacts
on the welfare of a country if the consumer places high
value on the environment. This result indicates that
countries with less environmental awareness are likely to
improve the welfare of their countries whereas countries
with strong environmental awareness are likely to reduce the
welfare of their countries with capital liberalization. The
other important result is that inclusion of the environment
in the consumer's utility function slows down the pace of
land development in the short-run dynamic model if the
developing country lowers its capital investment tax rate. / Graduation date: 1996

Identiferoai:union.ndltd.org:ORGSU/oai:ir.library.oregonstate.edu:1957/34501
Date09 January 1996
CreatorsCho, Bong-jae
ContributorsChao, Chi-Chur
Source SetsOregon State University
Languageen_US
Detected LanguageEnglish
TypeThesis/Dissertation

Page generated in 0.0018 seconds