Template-type: ReDIF-Paper 1.0
Author-Name: Manjira Datta
Author-Email: Manjira.Datta@asu.edu
Author-Homepage: http://wpcarey.asu.edu/Directory/stafffaculty.cfm?cobid=1039626
Author-Workplace-Name: W. P. Carey School of Business Department of Economics
Author-Workplace-Homepage: http://wpcarey.asu.edu/ecn/
Author-Name: Leonard Mirman
Author-Email: 
Author-Homepage: http://wpcarey.asu.edu/Directory/stafffaculty.cfm?cobid=2133549
Author-Workplace-Name: University of Virginia
Author-Workplace-Homepage: 

Title: Dynamic Externalities and Policy Coordination
Abstract: We introduce the possibility of trade in dynamic models with externalities and evaluate the consequences on the capital accumulation process, the market-clearing prices and policy making.
We consider mixed economies characterized by a blend of strategic and nonstrategic sectors. An equilibrium exists in the bilateral monopoly game because the strategic planner incorporates the future utility of the country and the presence of a nonstrategic sector in its decision making. Capital externality is one source of interdependence.  Equilibrium price, a function of both outputs, is another. Policy coordination is advantageous only when preferences are dissimilar and an externality is present.		
Classification-JEL: C73, D90, E61
Keywords: 
File-URL:http://wpcarey.asu.edu/tools/mytools/pubs_admin/FILES/wp97_11.pdf
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Handle: RePec:asu:wpaper:2132841