Economic Growth, Liberalization, and the Environment
Encyclopedia of Energy
Glossary Definition I. Interactions between the economy and the environment A. Economic growth and resource use B. Externalities. markets and incentives II. Trends in economic growth and resource use A. Trends in economic growth B. Trends in energy and materials C. Cross country differences in resource intensities III. Explaining the link between growth and resource use A. The environment-income relationship B. The role of environmental regulation IV. International trade and the environment A.
... the environment A. The pollution haven hypothesis B. Is trade beneficial? C. Is trade good for the environment 2 V. Environmental regulation and productivity A. The cost of environmental regulation B. General equilibrium effects C. In search of "Double Dividends" D. Confronting costs and benefits 3 GLOSSARY Comparative advantage. A country has a comparative advantage in a particular good if the ratio of costs to produce this good, relative to the cost to produce another good, is lower than the same cost ratio in other countries. Comparative advantage is the basis for trade: countries gain if they export the good they produce relatively most efficient. Economic growth. Steady increases in GDP. Energy intensity. Energy supply divided by GDP. Externality. A situation in which market transactions affect persons who are not involved in the transaction directly (i.e. not through market prices). GDP Gross domestic product. The sum of all output produced by economic activity within a country. GNP (gross national product) includes net income from abroad, e.g. rent, profits. General equilibrium. A situation in which all markets in the economy are in equilibrium. 4 Market equilibrium. A situation, characterized by a certain volume of trade and a price of a certain good, such that no market party wants to change behavior: no seller of the good wants to increase or decrease supply, no consumers wants reduce or increase demand. OECD countries. Organization for Economic Cooperation and Development. The Northern American and Western European countries, Greece, Turkey, and Mexico. Real price. Relative price of a commodity in terms of another (basket of) commodities. GDP is often measured in real prices (also labeled "at constant prices") to eliminate the effects of inflation (where inflation is the upward trend common in all prices, leading to a downward trend in the purchasing power of money). Total factor productivity (also: Multifactor productivity). Outputs per unit of input. Changes in total factor productivity measure technological change, by accounting how much of the increase in production is due to other factors than changes in inputs.