Presents a dynamic, two-country model of the world economy, incorporating restrictions with respect to: the availability of nonrenewable resources; the ability of the global environment to assimilate pollutants; the ability of the ecosystem to replenish renewable resources; the productivity of real resources (e.g., labor) in pollution abatement. In addition, the book explores the interactions between and among the natural resource, labor, product, and financial markets.
This text develops a complex open economy macro-model of the world economy that synthesizes the new Keynesian and new classical approaches to constructing aggregate models. It extends the two approaches by offering a more general international and intertemporal transmission mechanism.
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