Deforestation and the Real Exchange Rate

Abstract : Deforestation is a phenomenon that has largely been concentrated in the developing world. We construct a theoretical model of deforestation that focuses on the factors affecting the incentives to transform forested land into agricultural land. We show that: (i) lower discount rates and stronger institutions decrease deforestation; (ii) a depreciation in the real exchange rate increases deforestation in developing countries whereas the opposite obtains in developed countries; (iii) paradoxically, better institutions may exacerbate the deleterious impact of a depreciation in developing countries. These hypotheses are tested on an annual sample of 101 countries over the 1961-1988 period, and are not rejected by the data. Our results suggest that short-term macroeconomic policy, institutional factors, and the interaction between the two, are potentially important determinants of environmental outcomes.
Type de document :
Article dans une revue
Journal of Development Economics, Elsevier, 2008, 86 (2), pp.242-262
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https://hal.archives-ouvertes.fr/hal-00274384
Contributeur : Agnès Carcenac <>
Soumis le : vendredi 18 avril 2008 - 11:23:12
Dernière modification le : jeudi 11 janvier 2018 - 06:17:17

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  • HAL Id : hal-00274384, version 1

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Jean-Louis Arcand, Sylviane Guillaumont Jeanneney, Patrick Guillaumont. Deforestation and the Real Exchange Rate. Journal of Development Economics, Elsevier, 2008, 86 (2), pp.242-262. 〈hal-00274384〉

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