Eichner, Thomas; Pethig, Rüdiger - 2009
substitutes. In addition to energy the country produces the amount
x = X(rx) (2)
3
of some (composite) consumption good X with … input rx. The production functions B,G and
X are increasing and strictly concave. All fossil fuel needs to be imported at … exporting good X that is
traded at the constant world market price px ≡ 1. The trade balance reads
x−xd −(pe + q)e = 0, (3 …