Towards A General Equilibrium Model for Forestry and Sustainable Development

Abstract

Sustainable forestry has been considered as an integral component of sustainable development. In our study, we consider a simple Heckscher-Ohlin-Samuelson model consisting of four sectors along with agricultural and forestry sectors. We have compared different types of policy measures to find out which policy is best suited for the expansion of the forestry sector and the well-being of the rural population dependent on forestry. Our study shows that an increase in employment subsidy along with a boost in investment in the sector promotes not only the employment situation in the sector but also it improves the employment situation in other sectors as well. However, the goal of well-being of people through increase in wage rate is attained only through a policy mix of trade liberalization and investment in forestry.