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Sufficient and Necessary Conditions for Non-Catastrophic Growth

Author

Listed:
  • Juana AZNAR-MARQUEZ

    () (Universitat Miguel Hernández d’Elx (Spain))

  • Jose-Ramon RUIZ-TAMARIT

    () (Department of Economic Analysis, Universitat de València (Spain), and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

The reader will find in this paper a simple theoretical framework where to analyze the usual issues from environmental and economic growth literature, including the problem of global warming, the corresponding climate change, and the impact on economic system. This paper considers two environmental externalities: the first one is local and gives account of the marginal damage from emissions flow; the second one is aggregate, or global, and relates to the extreme damage which may happen if the accumulated stock of pollutants is on the threshold of a worldwide catastrophe. In this context dominated by market failures, the decentralized equilibrium path is inefficient and unsustainable, while the socially optimal balanced growth path shows a singularity with trajectories truncating and changing of course. With respect to the economy's long-run performance we s how environment matters in different ways and at different stages, and give conditions for sustainability of sustained growth.tudy

Suggested Citation

  • Juana AZNAR-MARQUEZ & Jose-Ramon RUIZ-TAMARIT, 2012. "Sufficient and Necessary Conditions for Non-Catastrophic Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2012027
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2012027.pdf
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    References listed on IDEAS

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    Cited by:

    1. Raouf BOUCEKKINE & Blanca MARTINEZ & José Ramon RUIZ-TAMARIT, 2013. "Optimal sustainable policies under pollution ceiling: the demographic side," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

    More about this item

    Keywords

    Environment; Externalities; Global Warming; Climate Change; Catastrophe; Optimal Sustained Growth; Sustainability;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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