A Positive Model of Growth and Pollution Controls
This paper describes a growth model in which pollutants are internal to a jurisdiction. To this end we develop a model of the joint determination of the rate of development of the economy through market interactions and the extent of pollution regulation through collective decision making. We show that depending on the collective decision making mechanism in place, the time path of pollution can display an inverted U shape, a "sideways mirrored" S, or an increasing (but bounded) level over time.
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