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Another reconciliation between economists and forestry experts: OLG-arguments

Another reconciliation between economists and forestry experts: OLG-arguments Foresters often claim that the goal of good forest policy is to have a sustained forest yield, or even a maximum sustainable yield. They also claim that people wish to save a few extra trees for their children. This bequest motive is not modelled in the standard approach to the optimal rotation problem. In this paper, we present a standard version of an overlapping generation model augmented with a simple tree technology. We show in particular that the market equilibrium can be dynamically inefficient, and that a bequest motive in terms of trees can correct for the overaccumulation of capital that causes the inefficiency. The bequest motive also enables us to account for a harvesting intensity varying with age (young people typically cut more than elderly people) in spite of a perfect capital market. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Environmental and Resource Economics Springer Journals

Another reconciliation between economists and forestry experts: OLG-arguments

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References (14)

Publisher
Springer Journals
Copyright
Copyright
Subject
Economics; Environmental Economics; Environmental Law/Policy/Ecojustice; Economic Policy; Economics, general; Environmental Management
ISSN
0924-6460
eISSN
1573-1502
DOI
10.1007/BF00305952
Publisher site
See Article on Publisher Site

Abstract

Foresters often claim that the goal of good forest policy is to have a sustained forest yield, or even a maximum sustainable yield. They also claim that people wish to save a few extra trees for their children. This bequest motive is not modelled in the standard approach to the optimal rotation problem. In this paper, we present a standard version of an overlapping generation model augmented with a simple tree technology. We show in particular that the market equilibrium can be dynamically inefficient, and that a bequest motive in terms of trees can correct for the overaccumulation of capital that causes the inefficiency. The bequest motive also enables us to account for a harvesting intensity varying with age (young people typically cut more than elderly people) in spite of a perfect capital market.

Journal

Environmental and Resource EconomicsSpringer Journals

Published: Aug 23, 2004

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