IDEAS home Printed from https://ideas.repec.org/a/bla/metroe/v54y2003i2-3p263-300.html
   My bibliography  Save this article

Short‐ and Long‐Run Effects of Environmental Degradation: A Structuralist Approach

Author

Listed:
  • Rabindra Nath Chakraborty

Abstract

The model presented in this paper distinguishes an industrial and an agricultural sector within a developing economy, which interact predominantly through the goods market. Investment determines saving through the Keynesian mechanism of effective demand. Environmental degradation results from the overexploitation of a renewable resource due to a common pool externality, which causes agricultural productivity to decline. The analysis shows that environmental degradation can reduce growth in the short run but increases growth (measured by the stock of industrial capital per capita) in the long run. Simulations reveal that the period of decline can be as long as 40 years. This suggests that the short‐term effects in this model may be more relevant for policy than the long‐run equilibria.

Suggested Citation

  • Rabindra Nath Chakraborty, 2003. "Short‐ and Long‐Run Effects of Environmental Degradation: A Structuralist Approach," Metroeconomica, Wiley Blackwell, vol. 54(2‐3), pages 263-300, May.
    • Handle: RePEc:bla:metroe:v:54:y:2003:i:2-3:p:263-300
    DOI: 10.1111/1467-999X.00167
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1467-999X.00167
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1467-999X.00167?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Storm, Servaas, 1997. "Domestic constraints on export-led growth: a case-study of India," Journal of Development Economics, Elsevier, vol. 52(1), pages 83-119, February.
    2. Bovenberg, A Lans & Smulders, Sjak A, 1996. "Transitional Impacts of Environmental Policy in an Endogenous Growth Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(4), pages 861-893, November.
    3. Dutt, Amitava Krishna, 1984. "Stagnation, Income Distribution and Monopoly Power," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 8(1), pages 25-40, March.
    4. Amartya K. Sen, 1966. "Peasants and Dualism with or without Surplus Labor," Journal of Political Economy, University of Chicago Press, vol. 74, pages 425-425.
    5. Smulders, Sjak & Gradus, Raymond, 1996. "Pollution abatement and long-term growth," European Journal of Political Economy, Elsevier, vol. 12(3), pages 505-532, November.
    6. Skott, Peter, 1999. "Growth and Stagnation in a Two-Sector Model: Kaldor's Mattioli Lectures: Review Article," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 23(3), pages 353-370, May.
    7. Dutt, Amitava Krishna, 1991. "Stagnation, Income Distribution and the Agrarian Constraint: A Note," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 15(3), pages 343-351, September.
    8. Chomitz, Kenneth M & Kumari, Kanta, 1998. "The Domestic Benefits of Tropical Forests: A Critical Review," The World Bank Research Observer, World Bank, vol. 13(1), pages 13-35, February.
    9. Rao, J Mohan, 1993. "Distribution and Growth with an Infrastructure Constraint," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 17(4), pages 369-389, December.
    10. H. Scott Gordon, 1954. "The Economic Theory of a Common-Property Resource: The Fishery," Journal of Political Economy, University of Chicago Press, vol. 62, pages 124-124.
    11. Chakraborty, Rabindra Nath, 1999. "Wachstum, Umweltschäden und Einkommensverteilung in Entwicklungsländern: das Beispiel Indien," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 13653, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Leonardo V. Vera, 2005. "Macroeconomic Adjustment Under An External And Fiscal Constraint: A Fix‐Price/Flex‐Price Approach," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 126-156, February.
    2. Lopez, Ramon E. & Anriquez, Gustavo & Gulati, Sumeet, 2003. "Sustainability With Unbalanced Growth: The Role Of Structural Change," Working Papers 15839, University of British Columbia, Food and Resource Economics.
    3. Vella, Eugenia & Dioikitopoulos, Evangelos V. & Kalyvitis, Sarantis, 2015. "Green Spending Reforms, Growth, And Welfare With Endogenous Subjective Discounting," Macroeconomic Dynamics, Cambridge University Press, vol. 19(6), pages 1240-1260, September.
    4. J. Aznar-Márquez & J. R. Ruiz-Tamarit, "undated". "Non-Catastrophic Endogenous Growth and the Environmental Kuznets Curve," Working Papers 2004-15, FEDEA.
    5. Sjak Smulders, 1995. "Entropy, environment, and endogenous economic growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 319-340, August.
    6. J.Aznar-Márquez & J.R. Ruiz-Tamarit, 2004. "Non-Catastrophic Endogenous Growth with Pollution and Abatement," Economic Working Papers at Centro de Estudios Andaluces E2004/80, Centro de Estudios Andaluces.
    7. Chu, Hsun & Lai, Ching-chong, 2014. "Abatement R&D, market imperfections, and environmental policy in an endogenous growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 41(C), pages 20-37.
    8. de Souza, Joao Paulo A., 2015. "Evidence of growth complementarity between agriculture and industry in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 34(C), pages 1-18.
    9. Rada, Codrina & von Arnim, Rudiger, 2012. "Structural transformation in China and India: A note on macroeconomic policies," Structural Change and Economic Dynamics, Elsevier, vol. 23(3), pages 264-275.
    10. Chen Jhy-hwa & Shieh Jhy-yuan & Chang Juin-jen, 2015. "Environmental policy and economic growth: the macroeconomic implications of the health effect," The B.E. Journal of Macroeconomics, De Gruyter, vol. 15(1), pages 1-31, January.
    11. Qi, Shunrong & Coggins, Jay S. & Xu, Lan, 2001. "Methodology For Integrated Environmental-Economic Analysis Of Gdp And Productivity," 2001 Annual meeting, August 5-8, Chicago, IL 20682, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Wei Jin & ZhongXiang Zhang, 2016. "China's pursuit of environmentally sustainable development: Harnessing the new engine of technological innovation," CCEP Working Papers 1601, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    13. Thierry Bréchet & Natali Hritonenko & Yuri Yatsenko, 2013. "Adaptation and Mitigation in Long-term Climate Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(2), pages 217-243, June.
    14. Santiago J. Rubio, Jose L. Garcia and Jose L. Hueso, 2009. "Neoclassical Growth, Environment and Technological Change: The Environmental Kuznets Curve," The Energy Journal, International Association for Energy Economics, vol. 0(Special I).
    15. Qi, Shunrong & Xu, Lan & Coggins, Jay S., 2001. "Integrated Environmental-Economic Accounting Of Gdp," 2001 Annual meeting, August 5-8, Chicago, IL 20582, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    16. Oueslati, Walid, 2013. "Short and Long-term Effects of Environmental Tax Reform," Climate Change and Sustainable Development 146354, Fondazione Eni Enrico Mattei (FEEM).
    17. Gardner Brown, 2000. "Renewable Natural Resource Management and Use Without Markets," Working Papers 0025, University of Washington, Department of Economics.
    18. Yuri Yatsenko, 2015. "Models and Games with Adaptation and Mitigation," CEEES Paper Series CE3S-01/15, European University at St. Petersburg, Department of Economics.
    19. Renström, Thomas I & Marsiliani, Laura, 2003. "Inequality, Environmental Protection and Growth," CEPR Discussion Papers 3754, C.E.P.R. Discussion Papers.
    20. Laura Marsiliani & Thomas Renstrom, 2002. "Inequality, Environmental Protection and Growth," Wallis Working Papers WP35, University of Rochester - Wallis Institute of Political Economy.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:metroe:v:54:y:2003:i:2-3:p:263-300. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0026-1386 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.