Heijnen, P.; Wagener, F.O.O. - In: Journal of Economic Dynamics and Control 37 (2013) 7, pp. 1322-1341
We extend the shallow lake model by adding the capital stock of an industry. A government can mitigate the effects of pollution arising from industrial activities by imposing the requirement to abate emissions. Within this framework two scenarios are examined: in the social optimal benchmark,...