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Environmental sustainability, nonlinear dynamics and chaos

  • Junxi Zhang

    ()

    (Department of Economics, National University of Singapore, 10 Kent Ridge Crescent, Singapore 119260, SINGAPORE)

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    This paper studies the possibility of nonlinear dynamics in a simple overlapping generations model with the environment - the John-Pecchenino (1994) model. We show that if people's concerns towards greener preferences and the maintenance efficiency relative to degradation are not sufficiently high, cyclically or chaotically fluctuating equilibria are more likely to exist; moreover, under a specific condition, a complicated topological structure might emerge. Our short-run analysis complements John and Pecchenino's long-run analysis and our findings suggest that the associated transition towards an environmentally sustainable state is not trivial.

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    Article provided by Springer in its journal Economic Theory.

    Volume (Year): 14 (1999)
    Issue (Month): 2 ()
    Pages: 489-500

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    Handle: RePEc:spr:joecth:v:14:y:1999:i:2:p:489-500
    Note: Received: September 10, 1996; revised version: October 2, 1997
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