April 23, 2018

DEFORESTATION MECHANISM: AN ECONOMIC ANALYSIS BASED ON THE FOKKER-PLANCK EQUATION

This paper describes how the Fokker-Planck equation and the simulation of stochastic trajectories can be used to explain capital accumulation and deforestation process.

The exploitation of the boundary conditions associated with this equation becomes the main tools of the analysis. Use of the Fokker-Planck enables us to construct a deforestation model without optimizing a farmer’s consumption behavior. The farmer’s consumption behavior can be treated as an arbitrarily determined parameter, by setting a given subsistence level

 

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