Environmental pollution is introduced both as a joint product and as a source of disutility in growth models. The purpose is to explore vital questions such as: is environmental protection compatible with economic growth; is it possible to have sustained growth in the long run without...

This paper analyses the consequences of tightening environmental policy for economic growth. To find out how the new balanced growth path is reached in the long run, we simulate numerically for the short and medium term the transition path of a change in environmental policy within an endogenous...