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Transitional impact of environmental policy in an endogenous growth model

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  • Bovenberg, A.L.

    (Tilburg University, Center For Economic Research)

  • Smulders, J.A.

    (Tilburg University, Center For Economic Research)

Abstract

To explore the link between a tighter environmental policy and economic growth, the authors employ an endogenous growth model with endogenous technological progress in abatement technologies. The environment, which is modelled as a renewable resource, acts both as a public consumption good and as a public input into production. The entire transition towards a new balanced-growth path after a tightening of environmental policy is computed analytically. The authors find sharp contrasts between short-run and long-run effects. Whereas the level and the growth rate of output may decline in the short run, income growth may improve in the long run. Copyright 1996 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Bovenberg, A.L. & Smulders, J.A., 1994. "Transitional impact of environmental policy in an endogenous growth model," Discussion Paper 1994-50, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:671ce9be-fcd5-4e87-94c9-66c4cebeb015
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    References listed on IDEAS

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    1. Caballe, Jordi & Santos, Manuel S, 1993. "On Endogenous Growth with Physical and Human Capital," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 1042-1067, December.
    2. Bovenberg, A.L. & Smulders, J.A., 1993. "Environmental quality and pollution-saving technological change in a two-sector endogenous growth model," Discussion Paper 1993-21, Tilburg University, Center for Economic Research.
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    6. Judd, Kenneth L., 1982. "An alternative to steady-state comparisons in perfect foresight models," Economics Letters, Elsevier, vol. 10(1-2), pages 55-59.
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