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Published in:
2010 | OriginalPaper | Chapter
Effects of Harvest Cost and Biological Shocks
Authors : Prof. Dr. Karl Farmer, Dr. Birgit Bednar-Friedl
Published in: Intertemporal Resource Economics
Publisher: Springer Berlin Heidelberg
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Until now we did not consider changes in the basic parameters of our log-linear CD OLG model with a renewable natural resource. Parameter shocks both to the economic system and shifts in the natural resource influence the dynamics of the market system. In this chapter, we investigate two forms of such shocks: shocks to the regeneration ability of natural resources and a push in harvest costs. Potential sources of the former shocks are flooding, landslide or windthrow, infectious diseases or invasive species that displace native ones. Both economic factors (technological change, opportunity costs of harvesting etc.) and natural ones (remoteness, weather and climatic conditions etc.) can cause a push in harvest costs. We want to investigate the economic impacts of these two different types of resource shocks in the steady state and during the transition phase.