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Title: |
Pollution Effects of Free Trade Areas: Simulations from a General Equilibrium Model |
| Author: |
Peridy, Nicolas |
| Author
Affiliation: |
University of Nantes, France |
| Source: |
International Economic Journal, March 2006, v. 20, no. 1, pp. 37-62 |
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Publication Date: |
March 2006 |
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Abstract: |
A two-factors, two-goods, three-countries general equilibrium model is developed to asssess the effects of a Free Trade Area (FTA) on pollution emissions. It also makes it possible to compare the effects of a disriminating commercial policy with alternative-non discriminating-policies, such as full trade liberalization or non discriminating protection. A theoretical model is first developed in order to take into account country-differences in factor endowment, evnironmental regulation, pollution abatement technology, marginal disutilities of pollution, as well as terms of trade effects. This model is subsequently calibrated and computed in accordance with empirical evidence. The main conclusion shows that the move from protection to FTA reduces world pollution emissions. A second result indicates that, in case of full trade liberalization, world pollution is further reduced. |
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