Constant-returns endogenous growth with pollution control

Abstract

Pollution control with positive externality from the government is incorporated in an endogenous growth model with “AK” production function. The result indicate that if consumption and abatement expenditure grows at a constant rate, pollution stock will have smaller growth rate. The growth rate of consumption in a command economy will in general be greater than in a competitive economy. A greater intertemporal elasticity of substitution will result in a lower growth rate only if the household's preference parameter against pollution is sufficiently small. The development strategy of pursuing higher growth rate accompanied by more pollution in the early stage of economic development is economically justifiable. The utility in a wealthier economy is always higher in all stages of development than in a poorer economy, as is the pollution stock, although it may converge in the steady state. Copyright Kluwer Academic Publishers 1994Endogenous growth, pollution control, externalities, sustainable development,

Environmental consciousness, economic growth, and macroeconomic instability

“…For example, Ligthart and van der Ploeg (1994), den Butter and Hofkes (1995) and Nielsen, Pedersen, and Sørensen (1995) assume that consumption and pollution are set to be time separable in a household's utility, so that a negative linkage between environmental consciousness and the economic growth rate is established. Running counter to the preceding viewpoint, some studies, e.g., Elbasha and Roe (1996), Huang and Cai (1994), Shieh, Lai, and Chen (2001), Itaya (2008), Chen, Shieh, Chang, and Lai (2009) and Chu and Lai (2014) also include pollution as a disutility in a multiplicative utility function of economic agents to capture the amenity effect of a clean environment. They find International Review of Economics and Finance 34 (2014) 151-160 ☆ The authors would like to thank Been-lon Chen, Hsun Chu, and the seminar participants at National Sun Yat-Sen University and National Chung Cheng University for their helpful comments and suggestions.…”

Survival to Adulthood and the Growth Drag of Pollution

“…Endogenous growth models of the Ak-type have been analyzed by Smulders (1999Smulders ( , 2000 or Beltratti (1996). See also Huang and Cai (1994), Michel and Rotillon (1995), Withagen (1995), Stokey (1996), Aghion and Howitt (1998) and Shieh, Lai and Chen (2001). 10 In other words, parents do not care about their descendants utility but receive a warm glow of giving (Andreoni, 1989).…”

Abatement R&D, market imperfections, and environmental policy in an endogenous growth model

“…The conventional wisdom in the literature (e.g., Huang and Cai, 1994;Ligthart and van der Ploeg, 1994;Grimaud, 1999) is often that there is an unavoidable conflict between economic growth and the conservation of the environment in the economy. However, in recent years a growing body of literature that proposes a positive growth effect of environmental taxation has accumulated.…”