IDEAS home Printed from https://ideas.repec.org/a/kea/keappr/ker-199912-15-2-13.html
   My bibliography  Save this article

Effects of Environmental Regulation on Macroeconomic Performance and Welfare in a Small Open Economy

Author

Listed:
  • Young-Jae Kim

    (Kyungil University)

  • Taek-Dong Yeo

    (Yeungnam University)

Abstract

This paper analyzes the effects of a stricter environmental policy on macroe-conomic performance and welfare in a two-sector intertemporal optimizing model. The direct application of pollution as a productive and flow argument to both the instantaneous utility function and production function is the main difference from the previous literature. Utilizing this model, we perform both long-run steady state and short-run transitional analysis as well as welfare analysis. In the long-run analysis, both capital stock and the amount of labor supply are lowered, but the consumptions of two goods are ambiguous. In the short-run transitional dynamics, the temporary policy shock results in permanent effects and the effects of anticipated policy change are dampened. The interesting outcome in the welfare analysis is that the stricter environmental policy may improve the agent's welfare, which is contrast to the generally accepted negative welfare effect in the previous works.

Suggested Citation

  • Young-Jae Kim & Taek-Dong Yeo, 1999. "Effects of Environmental Regulation on Macroeconomic Performance and Welfare in a Small Open Economy," Korean Economic Review, Korean Economic Association, vol. 15, pages 415-435.
    • Handle: RePEc:kea:keappr:ker-199912-15-2-13
    as

    Download full text from publisher

    File URL: http://keapaper.kea.ne.kr/RePEc/kea/keappr/KER-199912-15-2-13.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Environmental Regulation; Capital Accumulation; Current Account; Welfare;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

    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:kea:keappr:ker-199912-15-2-13. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: KEA (email available below). General contact details of provider: https://edirc.repec.org/data/keaaaea.html .

    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.