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Sustainable development with extractive and non-extractive use of the environment in production

  • F. Butter
  • M. Hofkes

This paper considers an economy in which the environment plays a role both in welfare and production. An endogenous growth model, which allows for abatement activities, is formulated in order to study the impact of pollution on welfare and long-term growth. Conditions for optimal and balanced economic growth are discussed and a numerical example is given to provide some insight in the mechanisms at work in the model. Copyright Kluwer Academic Publishers 1995

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 6 (1995)
Issue (Month): 4 (December)
Pages: 341-358

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Handle: RePEc:kap:enreec:v:6:y:1995:i:4:p:341-358
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  1. Tahvonen, Olli & Kuuluvainen, Jari, 1991. "Optimal growth with renewable resources and pollution," European Economic Review, Elsevier, vol. 35(2-3), pages 650-661, April.
  2. Mulligan, C.B. & Sala-i-Martin, X., 1992. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," Papers 651, Yale - Economic Growth Center.
  3. Gruver, Gene W., 1976. "Optimal investment in pollution control capital in a neoclassical growth context," Journal of Environmental Economics and Management, Elsevier, vol. 3(3), pages 165-177, October.
  4. Raymond Gradus & Sjak Smulders, 1993. "The trade-off between environmental care and long-term growth—Pollution in three prototype growth models," Journal of Economics, Springer, vol. 58(1), pages 25-51, February.
  5. Bovenberg, A.L. & Smulders, J.A., 1993. "Environmental quality and pollution-saving technological change in a two-sector endogenous growth model," Discussion Paper 1993-21, Tilburg University, Center for Economic Research.
  6. Sergio Rebelo, 1999. "Long Run Policy Analysis and Long Run Growth," Levine's Working Paper Archive 2114, David K. Levine.
  7. F. Butter & H. Verbruggen, 1994. "Measuring the trade-off between economic growth and a clean environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(2), pages 187-208, April.
  8. Frederick Ploeg & Cees Withagen, 1991. "Pollution control and the Ramsey problem," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(2), pages 215-236, June.
  9. Keeler, Emmett & Spence, Michael & Zeckhauser, Richard, 1972. "The optimal control of pollution," Journal of Economic Theory, Elsevier, vol. 4(1), pages 19-34, February.
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