Environmental protection and economic growth
This paper explores the link between environmental policy and economic growth by employing an extension of the AK Growth Model. We include a state equation for renewable natural resources. We assume that the change in environmental regulations induces costs and that economic agents also derive some utility from capital stock accumulation vis-`a-vis the environment. Using the Hopf bifurcation theorem, we show that cyclical environmental policy strategies are optimal, providing theoretical support for the Environmental Kuznets Curve.
Year of publication: |
2009-08-24
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Authors: | Kuhl Teles, Vladimir ; Arraes, Ronaldo A. |
Institutions: | Escola de Economia de São Paulo (EESP), Fundação Getulio Vargas (FGV) |
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