We explore the idea of regime switching as a new methodological approach in the analysis of the emission-income relationship. A static smooth transition regression model is developed with fixed-effects. The basic idea is that when some threshold is passed, then the economy could move smoothly to...

We explore the idea of regime switching as a new methodological approach in the analysis of the emission - income relationship. We formalize the idea by using a simple static model of profit maximization where above a threshold income level a more stringent environmental policy induces a...

We explore the idea of regime switching as a new methodological approach in the analysis of the emission-income relationship. We formalize the idea by using a simple static model of profit maximization where above a threshold income level a more stringent environmental policy could induce a...