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The Environmental Kuznets Curve and the Structural Change Hypothesis

Author

Listed:
  • Simone Marsiglio

    (University of Wollongong)

  • Alberto Ansuategi

    (University of the Basque Country)

  • Maria Carmen Gallastegui

    (University of the Basque Country)

Abstract

We provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted U-shaped income–pollution relationships. Differently from previous research which mainly focuses on empirical, static or general equilibrium models, we develop a standard balanced growth path (BGP) analysis. We show that along the BGP equilibrium an inverted U-shaped income–pollution relationship may occur as a response to structural changes, but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter. Moreover, we show that the negative relationship between income and pollution can only be a transitory phenomenon, and in the long run pollution will increase as income rises, generating overall an N-shaped pattern.

Suggested Citation

  • Simone Marsiglio & Alberto Ansuategi & Maria Carmen Gallastegui, 2016. "The Environmental Kuznets Curve and the Structural Change Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(2), pages 265-288, February.
    • Handle: RePEc:kap:enreec:v:63:y:2016:i:2:d:10.1007_s10640-015-9942-9
    DOI: 10.1007/s10640-015-9942-9
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    More about this item

    Keywords

    Environmental Kuznets curve; Economic growth; Structural change;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • 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

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