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Environmental consciousness, economic growth, and macroeconomic instability

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Listed:
  • Shieh, Jhy-yuan
  • Chen, Jhy-hwa
  • Chang, Shu-hua
  • Lai, Ching-chong

Abstract

This paper develops an endogenous growth model to examine the linkages between environmental consciousness and economic growth. It is found that macroeconomic instability can arise in a simple AK-type growth model when the pollution externality is present only in the agent's utility function. It is also found that the impact of environmental consciousness on the economic growth rate is ambiguous. The economic systems (a decentralized versus centralized economy) and the ecological evolution (the specific pollution growth rate) are two crucial factors that determine the relationship between environmental consciousness and economic growth.

Suggested Citation

  • Shieh, Jhy-yuan & Chen, Jhy-hwa & Chang, Shu-hua & Lai, Ching-chong, 2014. "Environmental consciousness, economic growth, and macroeconomic instability," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 151-160.
  • Handle: RePEc:eee:reveco:v:34:y:2014:i:c:p:151-160
    DOI: 10.1016/j.iref.2014.08.006
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    References listed on IDEAS

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    Cited by:

    1. Tai, Meng-Yi & Chao, Chi-Chur & Hu, Shih-Wen, 2015. "Pollution, health and economic growth," The North American Journal of Economics and Finance, Elsevier, vol. 32(C), pages 155-161.

    More about this item

    Keywords

    Endogenous growth; Environmental consciousness; Macroeconomic instability; Pollution;

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

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