The Impacts of Environmental Policy on Industrial Allocation: A Transboundary Pollution Dynamic Game

Explore a dynamic game analysis of transboundary pollution and its impact on industrial allocation in this 52-minute webinar from the Dynamic Games and Applications Seminar series. Delve into the study of how firm distribution and trade costs influence governments' optimal emission policies and subsequent industry allocation. Examine the microeconomic framework based on the Economic Geography literature, specifically the Footloose Capital Model, and its integration into a macroeconomic transboundary pollution linear-quadratic dynamic game. Discover key findings on the relationship between pollution damage levels, industrial share, and emissions per firm, as well as the emergence of a new agglomerative force in strategic government decisions. Gain insights into the potential for industrial activity concentration in core regions as a result of environmental policies.