IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v64y2019icp172-177.html
   My bibliography  Save this article

Environmental regulation and economic cycles

Author

Listed:
  • George, Halkos E.
  • George, Papageorgiou J.
  • Emmanuel, Halkos G.
  • John, Papageorgiou G.

Abstract

This paper examines economic cycles that do not depend on exogenous economic actions. More precisely, the paper develops a positive model of government behavior in order to define the intertemporal fiscal policies that are optimal for a country and which, determine both the optimal budget level and the optimal level of environmental quality. For this purpose, we establish an optimal control model involving intertemporal subsidy strategies characteristically used by an authoritarian government similar to those found in central Europe. It will be shown that by applying the Hopf bifurcation theorem,a cyclical strategy – that is, waves of regulation, environmental subsidies alternating with deregulation and cuts in social programs – may represent an optimal policy.

Suggested Citation

  • George, Halkos E. & George, Papageorgiou J. & Emmanuel, Halkos G. & John, Papageorgiou G., 2019. "Environmental regulation and economic cycles," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 172-177.
    • Handle: RePEc:eee:ecanpo:v:64:y:2019:i:c:p:172-177
    DOI: 10.1016/j.eap.2019.07.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S031359261930061X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2019.07.005?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
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Engelbert Dockner & Gustav Feichtinger, 1991. "On the optimality of limit cycles in dynamic economic systems," Journal of Economics, Springer, vol. 53(1), pages 31-50, February.
    2. repec:hal:pseose:halshs-00555625 is not listed on IDEAS
    3. Mouez Fodha & Thomas Seegmuller, 2014. "Environmental Quality, Public Debt and Economic Development," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(4), pages 487-504, April.
    4. Halkos, George E. & Paizanos, Epameinondas Α., 2016. "The effects of fiscal policy on CO2 emissions: Evidence from the U.S.A," Energy Policy, Elsevier, vol. 88(C), pages 317-328.
    5. Semmler, Willi & Sieveking, Malte, 2000. "Critical debt and debt dynamics," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 1121-1144, June.
    6. Halkos, George & Papageorgiou, George, 2014. "Controlling polluting firms: Nash and Stackelberg strategies," MPRA Paper 58947, University Library of Munich, Germany.
    7. Fodha, Mouez & Seegmuller, Thomas, 2012. "A Note On Environmental Policy And Public Debt Stabilization," Macroeconomic Dynamics, Cambridge University Press, vol. 16(3), pages 477-492, June.
    8. George E. Halkos & Epameinondas A. Paizanos, 2017. "The channels of the effect of government expenditure on the environment: evidence using dynamic panel data," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 60(1), pages 135-157, January.
    9. Halkos, George E. & Papageorgiou, George J., 2018. "Pollution, environmental taxes and public debt: A game theory setup," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 111-120.
    10. Alfred Greiner & Bettina Fincke, 2009. "Public Debt and Economic Growth," Dynamic Modeling and Econometrics in Economics and Finance, Springer, number 978-3-642-01745-2, July-Dece.
    11. George E. Halkos & Epameinondas A. Paizanos, 2016. "Fiscal Policy and Economic Performance: A Review," Journal of Reviews on Global Economics, Lifescience Global, vol. 5, pages 1-15.
    12. Halkos, George & Papageorgiou, George, 2017. "Public debt, pollution and environmental taxes: Nash and Stackelberg equilibria," MPRA Paper 81982, University Library of Munich, Germany.
    13. Halkos, George E. & Papageorgiou, George J., 2017. "A dynamic game with feedback strategies for internalizing externalities," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 147-157.
    14. Halkos, George & Papageorgiou, George, 2016. "Public bad conflicts: Cyclical Nash strategies and Stackelberg solutions," MPRA Paper 70635, University Library of Munich, Germany.
    15. George Halkos, 1994. "Optimal abatement of sulphur emissions in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 127-150, April.
    16. Becker, Gary S & Murphy, Kevin M, 1988. "A Theory of Rational Addiction," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 675-700, August.
    17. George Halkos, 1996. "Incomplete information in the acid rain game," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 23(2), pages 129-148, June.
    18. Halkos, George E. & Paizanos, Epameinondas A., 2016. "Environmental Macroeconomics: Economic Growth, Fiscal Spending and Environmental Quality," International Review of Environmental and Resource Economics, now publishers, vol. 9(3-4), pages 321-362, September.
    19. Halkos, George E., 1993. "Sulphur abatement policy: Implications of cost differentials," Energy Policy, Elsevier, vol. 21(10), pages 1035-1043, October.
    20. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(3), pages 371-400.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu Zhang & Jie Wang & Jiakai Chen & Weizhong Liu, 2023. "Does environmental regulation policy help improve business performance of manufacturing enterprises? evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(5), pages 4335-4364, May.
    2. Halkos, George E. & Papageorgiou, George J. & Halkos, Emmanuel G. & Papageorgiou, John G., 2020. "Public debt games with corruption and tax evasion," Economic Analysis and Policy, Elsevier, vol. 66(C), pages 250-261.
    3. Jongeneel, Roel & Gonzalez-Martinez, Ana Rosa, 2022. "The role of market drivers in explaining the EU milk supply after the milk quota abolition," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 194-209.

    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. Halkos, George & Papageorgiou, George, 2017. "Public debt, pollution and environmental taxes: Nash and Stackelberg equilibria," MPRA Paper 81982, University Library of Munich, Germany.
    2. Halkos, George & Kitsos, Christos, 2018. "Mathematics vs. Statistics in tackling Environmental Economics uncertainty," MPRA Paper 85280, University Library of Munich, Germany.
    3. George E. Halkos & Dimitra C. Kitsou, 2018. "Weighted location differential tax in environmental problems," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(1), pages 1-15, January.
    4. Halkos, George & Managi, Shunsuke & Tsilika, Kyriaki, 2018. "Spatiotemporal distribution of inclusive wealth data: An illustrated guide," MPRA Paper 85711, University Library of Munich, Germany.
    5. George Halkos & Shunsuke Managi & Kyriaki Tsilika, 2018. "Measuring air polluters’ responsibility in transboundary pollution networks," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(3), pages 619-639, July.
    6. Halkos, George E. & Papageorgiou, George J., 2018. "Pollution, environmental taxes and public debt: A game theory setup," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 111-120.
    7. Halkos, George, 2018. "Environment and Sustainable Development," MPRA Paper 86490, University Library of Munich, Germany.
    8. Halkos, George & Kitsos, Christos, 2018. "Uncertainty in environmental economics: The problem of entropy and model choice," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 127-140.
    9. Halkos, George & Tsilika, Kyriaki, 2017. "Computational analysis of source receptor air pollution problems," MPRA Paper 77305, University Library of Munich, Germany.
    10. Halkos, George & Papageorgiou, George, 2012. "Pollution abatement and reservation prices in a market game," MPRA Paper 42150, University Library of Munich, Germany.
    11. Halkos, George & Papageorgiou, George, 2016. "Optimal abatement and taxation for internalizing externalities: A dynamic game with feedback strategies," MPRA Paper 74467, University Library of Munich, Germany.
    12. Halkos, George & Barmpoudaki, Kyriaki & Voulagkas, George & Tsilika, Kyriaki, 2018. "Exploring the EMEP Input-Output model of air pollution," MPRA Paper 90267, University Library of Munich, Germany.
    13. Halkos, George E. & Papageorgiou, George J., 2017. "A dynamic game with feedback strategies for internalizing externalities," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 147-157.
    14. Halkos, George & Kitsou, Dimitra, 2014. "A weighted location differential tax method in environmental problems," MPRA Paper 59502, University Library of Munich, Germany.
    15. George E. Halkos & Kyriaki D. Tsilika, 2021. "Towards Better Computational Tools for Effective Environmental Policy Planning," Computational Economics, Springer;Society for Computational Economics, vol. 58(3), pages 555-572, October.
    16. Van Bon Nguyen, 2024. "Does governance contribute to the public spending - CO2 emissions nexus in developing economies? Policy lessons for sustainable development," Public Sector Economics, Institute of Public Finance, vol. 48(1), pages 79-101.
    17. Chan, Ying Tung, 2020. "Are macroeconomic policies better in curbing air pollution than environmental policies? A DSGE approach with carbon-dependent fiscal and monetary policies," Energy Policy, Elsevier, vol. 141(C).
    18. Klaus M. Leisinger, 2008. "Zur Relevanz der Unternehmensethik in der Betriebswirtschaftlehre (oder: The Business of Business is still Business–But the Rules have Changed)," Schmalenbach Journal of Business Research, Springer, vol. 60(58), pages 26-49, January.
    19. Nicolas Clootens & Francesco Magris, 2020. "Non-Renewable Resource Use Sustainability and Public Debt," Working Papers halshs-02952314, HAL.
    20. Halkos, George & Gkargkavouzi, Anastasia, 2024. "Personality traits and associations with pro-environmental and economically-relevant behaviors: A brief overview of research evidence," MPRA Paper 119775, University Library of Munich, Germany.

    More about this item

    Keywords

    Budget; Environmental resources; Subsidies; Hopf bifurcation; Optimal control;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics

    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:eee:ecanpo:v:64:y:2019:i:c:p:172-177. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    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.