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Economics Research Institute Study Paper




Utah State University Department of Economics

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We present a computable general equilibrium model of the interface between the Great Salt Lake (GSL) ecosystem and the regional economy that impacts the ecosystem. With respect to the ecosystem, the model treats the various representative species as net-energy maximizers and bases population dynamics on the period-by-period sizes of surplus net energy. Energy markets-where predators and prey exchange biomass-determine equilibrium energy prices. With respect to the regional economy, we model five production sectors (at the aggregate industry level)-brine cyst harvesters, the mineral-extraction industry, agriculture, recreation, and a composite-good industry-as well as the household sector. By performing dynamic simulations of the joint ecosystem-regional economy model, we isolate the effects of period-byperiod stochastic changes in salinity levels and an initial shock to species-population levels on the ecological and economic variables of the model.