Pantelis Kalaitzidakis () (University of Crete, Greece and The Rimini Centre for Economic Analysis, Rimini, Italy.) Theofanis P. Mamuneas () (University of Cyprus, Cyprus and The Rimini Centre for Economic Analysis, Rimini, Italy.) Thanasis Stengos () (University of Guelph, Canada and The Rimini Centre for Economic Analysis, Rimini, Italy.)
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In this paper we examine the effect of pollution, as measured by CO2 emissions, on economic growth among a set of OECD countries during the period 1981-1998. We examine the relationship between total factor productivity (TFP) growth and pollution using a semiparametric smooth coefficient model that allow us to directly estimate the output elasticity of pollution. The results indicate that there exists a nonlinear relationship between pollution and TFP growth. The output elasticity of pollution is small with an average sample value of 0.008. In addition we find an average contribution of pollution to productivity growth of about 1 percent for the period 1981-1998. JEL Classifications: C14, O13, O40
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Paper provided by Rimini Centre for Economic Analysis in its series Working Paper Series with number
06-08.
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