Environmental Concern and Rational Production, Consumption and Rehabilitation
AbstractUtility from consumption might be spoiled by the degradation of the environment. The incorporation of a direct dependency of utility on the state of the environment through environmental concern and the incorporation of the effects of production pollution and rehabilitative investment on the environment into a lifetime utility maximization model imply that a minimal degree of impatience is necessary for an interior steady state to exist. This steady state is unique, approachable along a path with damped oscillations of consumption and rehabilitative investment, and characterized by a larger production than in the steady state without environmental concern.
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Bibliographic InfoPaper provided by School of Economics, University of Wollongong, NSW, Australia in its series Economics Working Papers with number wp08-10.
Length: 16 pages
Date of creation: 2008
Date of revision:
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Postal: School of Economics, University of Wollongong, Northfields Avenue, Wollongong NSW 2522 Australia
Phone: +612 4221-3659
Fax: +612 4221-3725
Web page: http://business.uow.edu.au/econ/index.html
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Consumption; environmental investment; golden rule;
Find related papers by JEL classification:
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-07-20 (Agricultural Economics)
- NEP-ALL-2008-07-20 (All new papers)
- NEP-DGE-2008-07-20 (Dynamic General Equilibrium)
- NEP-ENV-2008-07-20 (Environmental Economics)
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