Chapter

Empirical Applications of the Dynamic Economic Model

Trond Bjørndal and Gordon R. Munro

in The Economics and Management of World Fisheries

Published in print October 2012 | ISBN: 9780199576753
Published online January 2013 | e-ISBN: 9780191745973 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199576753.003.0004
Empirical Applications of the Dynamic Economic Model

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This chapter introduces several extensions to the basic capital theoretic economic model of the fishery discussed in chapter 3. Specifically, the extensions involve the incorporating the processing sector in the model, moving from single species to multiple species fisheries, introducing non-malleable produced and human capital into the model, and giving explicit recognition to the role uncertainty. While all of the extensions are important, the most important, and analytically demanding, is that of relaxing the restrictive assumption that both produced capital and human capital in the fishery are perfectly malleable. The extension has profound consequences for the question of the optimal rate of investment in natural capital in the form of capture fishery resources. This question ,in turn, now has major policy implications, given the rapidly expanding interest in the rebuilding of, i.e. investing in, hitherto overexploited world capture fishery resources.

Keywords: processing sector; multi-species fisheries; uncertainty; non-malleability of capital

Chapter.  8933 words.  Illustrated.

Subjects: Economic Development and Growth

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