We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
POLLUTION ABATEMENT AS A SOURCE OF STABILIZATION AND LONG-RUN GROWTH.
- Authors
Palivos, Theodore; Varvarigos, Dimitrios
- Abstract
In a two-period overlapping-generations model with production, we consider the damaging impact of environmental degradation on health and consequently life expectancy. Despite the presence of social constant returns to capital, which would otherwise generate unbounded growth, when pollution is left unabated, the economy cannot achieve such a path. Instead, it converges either to a stationary level of capital per worker or to a cycle in which capital per worker oscillates permanently. The government's involvement in environmental preservation proves crucial for both short-term dynamics and long-term prospects of the economy. Particularly, an active policy of pollution abatement emerges as an important engine of long-run economic growth. Furthermore, by eliminating the occurrence of limit cycles, pollution abatement is also a powerful source of stabilization.
- Subjects
POLLUTION; ABATEMENT (Atmospheric chemistry); ECONOMIC stabilization; ENVIRONMENTAL degradation; ECONOMIC development
- Publication
Macroeconomic Dynamics, 2017, Vol 21, Issue 3, p644
- ISSN
1365-1005
- Publication type
Article
- DOI
10.1017/S1365100515000632