There are several quantitative studies (mainly linear regressions) that describe the behavior of deforestation in Brazil. However, I do not find dynamic systems that relate economic factors and deforestation. DSGE models could provide a theoretical basis for the explanation of deforestation in Brazil. They would also allow forecasts to be made and avoid recurring problems found in linear models (endogeneity, heteroscedasticity, etc.). But why isn't there a DSGE model that considers deforestation?
DSGE models are designed to address business cycle issues. They focus on short run transmission mechanisms.
Deforestation is a long-run issue. It is an economic growth question, not a business cycle one. You may want to look at growth models with renewable resources use.
Dear Felipe, there are some exercises with CGE models for Brazil that could be helpful. These are 2 examples which incorporate forest management (including deforestation) with policy variables (economic among others) simulation.
An example of a recursive dynamic CGE:
Thesis Socioeconomic and Environmental Impacts of Forest Concession...
A DSGE application:
https://www.ipea.gov.br/portal/images/stories/PDFs/TDs/dp_247.pdf
Best.
Thank you very much
Luis Rivera , about IPEA's exercise, it was one of the first to use deforestation instead of greenhouse gas emissions. The reason is that deforestation data is easier to calculate and more accessible. It even mentions that models with two countries, and considering greenhouse gases, were only recently estimated.
Perhaps this is the explanation of why I was unable to find publications involving DSGE and deforestation.
I also think that David de la Croix is correct. In Brazil the main cause of deforestation is investment in new pasture areas. So, maybe deforestation should be analyzed in the long run.
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