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DOES INTERNATIONAL TRADE HURT THE ENVIRONMENT? OLD THEORY, NEW DEVELOPMENTS

DOES INTERNATIONAL TRADE HURT THE ENVIRONMENT? OLD THEORY, NEW DEVELOPMENTS In this article, it is shown that if a country specializes in the production of dirty goods it does not necessarily become dirtier as the pollution haven hypothesis predicts. A trade equilibrium is constructed where a rich country specializes in the production of the clean good and a poor country specializes in the production of the dirty good and both countries become cleaner after the gains from trade are internalized. The result casts serious doubts about the effectiveness of using trade restrictions to improve the environmental conditions of developing countries as some environmental groups have proposed. In this particular case, the use of restrictions is counterproductive not only for the poor country but also for the rich country. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The International Trade Journal Taylor & Francis

DOES INTERNATIONAL TRADE HURT THE ENVIRONMENT? OLD THEORY, NEW DEVELOPMENTS

The International Trade Journal , Volume 14 (4): 11 – Dec 1, 2000
11 pages

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References (6)

Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1521-0545
eISSN
0885-3908
DOI
10.1080/08853900050217417
Publisher site
See Article on Publisher Site

Abstract

In this article, it is shown that if a country specializes in the production of dirty goods it does not necessarily become dirtier as the pollution haven hypothesis predicts. A trade equilibrium is constructed where a rich country specializes in the production of the clean good and a poor country specializes in the production of the dirty good and both countries become cleaner after the gains from trade are internalized. The result casts serious doubts about the effectiveness of using trade restrictions to improve the environmental conditions of developing countries as some environmental groups have proposed. In this particular case, the use of restrictions is counterproductive not only for the poor country but also for the rich country.

Journal

The International Trade JournalTaylor & Francis

Published: Dec 1, 2000

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