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- Title
Economic Growth under Stochastic Population and Pollution Shocks.
- Authors
Azomahou, Théophile T.; Mishra, Tapas; Parhi, Mamata
- Abstract
We study dynamics of interactions among economic growth, population, and environmental quality when stochastic shocks in these systems display long-memory property. We make two important contributions. First, we show that the long-memory persistence in economic growth is determined jointly by the convergence speed of shocks in both environmental quality and population. Second, by simulating a modified Solow-Swan economy we demonstrate that the convergence-speed of shocks in these systems significantly affects the long-run growth trajectory of output. Our empirical examination evince that adjustment of output to long-run equilibrium is very slow, thanks to the slowly dissipating population and pollution shocks.
- Publication
Manchester School (1463-6786), 2015, Vol 83, Issue 3, p314
- ISSN
1463-6786
- Publication type
Academic Journal
- DOI
10.1111/manc.12062