Research

Working Papers

"Biological diversity in General Equilibrium"

Abstract:This paper develops a multi-country general equilibrium model in which biodiversity functions as natural capital that augments total factor productivity. Biodiversity depreciates endogenously through a logistic function of aggregate intermediate input use, weighted by an ecologically grounded spillover matrix that captures cross-border externalities. The logistic structure generates nonlinear threshold effects: ecological damage remains modest under low pressure but accelerates sharply once critical tipping points are reached. Comparing the constrained efficient allocation with the decentralized Nash equilibrium---where each country internalizes only the domestic component of biodiversity depreciation---I establish three main results. First, decentralized economies systematically overuse intermediate inputs, leading to lower biodiversity stocks and higher depreciation rates. Second, the output ranking between the two regimes is heterogeneous across countries: some produce more under decentralization due to intensive input use, while others produce more under the planner due to preserved ecosystem productivity and capital accumulation. A log-linear decomposition traces this heterogeneity to the opposing forces of factor reallocation. Third, I derive closed-form country-specific Pigouvian taxes on input use whose magnitude is pinned down by a single sufficient statistic---the tax-relevant net balance of ecological influence and exposure. Calibrating the model to EU--27 data with a spillover matrix constructed from WWF ecoregion boundaries, I show that optimal corrective taxes vary by an order of magnitude across member states. Uniform taxation would substantially distort the allocation, penalizing ecologically benign economies while under-correcting for high-impact ones.

"Wasteconomics: The role of Chinese waste-import policies on US recycling sector" (with Hasan Çetin and Ekin Ulusoy)

Abstract: China’s 2017 National Sword cut allowable contamination in imported recyclables to 0.5%. We study the U.S. recycling sector’s response in trade, processing, dumping, and prices. We build a two-country open circular-economy model where households generate waste, and waste managers either recycle or dump domestic and imported waste to supply a recycled input used with labor and capital. Calibrated to U.S. plastic-waste data, the model quantifies changes in recycling rates, trade volumes, and allocations under alternative policies.

Work in Progress

Wasteconomics: Endogenous trade-costs  (with Hasan Çetin and Ekin Ulusoy)