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Equilibrium selection in an environmental growth model with a S-shaped production function

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  • Bella, Giovanni
  • Liuzzi, Danilo
  • Mattana, Paolo
  • Venturi, Beatrice

Abstract

This paper presents a purely dynamic economic-environmental growth model with a S-shaped production function and a pollution externality. We first outline the role of the saving rate in inducing/suppressing a dual steady-state, one with lower capital and pollution (the “green” steady state) than the other (the “dirty” steady state). Assuming the saving rate is such that the economy possesses a dual steady state, the second part of the paper exploits global analysis tecniques to study conditions such that the economy is able to escape the dirty steady state and approach the green steady state.

Suggested Citation

  • Bella, Giovanni & Liuzzi, Danilo & Mattana, Paolo & Venturi, Beatrice, 2020. "Equilibrium selection in an environmental growth model with a S-shaped production function," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    • Handle: RePEc:eee:chsofr:v:130:y:2020:i:c:s0960077919303789
    DOI: 10.1016/j.chaos.2019.109432
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    References listed on IDEAS

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    1. Bella, Giovanni & Mattana, Paolo, 2014. "Global indeterminacy of the equilibrium in the Chamley model of endogenous growth in the vicinity of a Bogdanov–Takens bifurcation," Mathematical Social Sciences, Elsevier, vol. 71(C), pages 69-79.
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    3. La Torre, Davide & Liuzzi, Danilo & Marsiglio, Simone, 2015. "Pollution diffusion and abatement activities across space and over time," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 48-63.
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    6. Lucas Bretschger & Aimilia Pattakou, 2019. "Correction to: As Bad as it Gets: How Climate Damage Functions Affect Growth and the Social Cost of Carbon," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 27-27, January.
    7. Lucas Bretschger & Aimilia Pattakou, 2019. "As Bad as it Gets: How Climate Damage Functions Affect Growth and the Social Cost of Carbon," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 5-26, January.
    8. Nordhaus, William D., 1993. "Rolling the 'DICE': an optimal transition path for controlling greenhouse gases," Resource and Energy Economics, Elsevier, vol. 15(1), pages 27-50, March.
    9. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271, Elsevier.
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    Cited by:

    1. Alexeeva, Tatyana A. & Kuznetsov, Nikolay V. & Mokaev, Timur N., 2021. "Study of irregular dynamics in an economic model: attractor localization and Lyapunov exponents," Chaos, Solitons & Fractals, Elsevier, vol. 152(C).

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