Nonlinearities in the ecological-economic dynamics of forests imply the existence of multiple solutions in forestry management problems, specified fully for all dynamic patterns of amenities. These imply the possibilities of discontinuities, critical thresholds, and irregular or chaotic oscillations in such systems. Specific policy problems considered include rotation periods, pest management, and size of cuts.
In this paper, we investigate a nonlinear macrodynamic model of business cycles which describes the dynamic interaction of two regions which are connected through inter-regional trade and inter-regional capital movement with fixed exchange rates. Our model is formulated as a five-dimensional system of nonlinear differential equations, which is a two-regional extension of the Kaldorian business cycle model. We study the local stability/instability and the condition for the existence of the cyclical fluctuation analytically, and we also present some numerical examples which support our analytical results.
This paper examines the possibility of economic slump with the liquidity trap in a sticky price model. The main findings of the paper are: First, the appearance of recessions and depressions with liquidity traps is observed as equilibrium paths if the government conducts a contractionary monetary policy. Second, the model exhibits the indeterminacy of equilibrium paths. Finally, expansive monetary policy is an effective tool to escape from the liquidity trap, although fiscal stimulus causes full crowding out.
This paper demonstrates that an adjustment process of the global carbon tax rate can be chaotic. To this end, a discrete-time dynamic game is constructed in which the environmental regulator updates the tax rate for given observation of the regulated industry's CO2 emissions. It is shown that if the regulator considers the marginal benefit of increasing the tax rate is high, the adjustment process becomes chaotic. It is also demonstrated that the atmospheric CO2 concentration level with chaotic emission is higher than the level with a stationary state of “high tax and low emissions.” Given that the regulator wishes to control the concentration level with low emission, an adaptive adjustment of the tax rate is investigated.
On the basis of available data, we have built an eco-conscious socioeconomic framework model including 36 sectors by means of environmental value-added theory and developed energy and carbon dioxide (CO2) emission related scenarios in order to evaluate comprehensively the effect of carbon tax on CO2 emission curtailment and introduction of suitable alternative energy in China. An optimal carbon tax rate is derived endogenously.
We present a two-stage noncooperative game model which contains both complementary and substitutive lobbying activity and a regulatory body with an extraordinary degree of discretionary power. We establish the following results: (1) While a substitutive lobbying firm can reduce its lobbying expenses more than a complementary firm, the substitutive lobbying firm's quota is always smaller than that of the complementary firm. (2) The equilibrium pure-tax rate is the same in the substitutive case as in the complementary. (3) The regulator's utility in the complementary case exceeds the utility in the substitutive case, and whether the substitutive firm's profit is higher than the complementary one's depends on the tax rate and the degree of lobbying spillover effects. (4) The free-entry equilibrium in the substitutive case attains the second-best allocation. (5) The equilibrium number of the firms in the complementary free-entry equilibrium becomes excessive or insufficient, depending on how the tax system is constructed.