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Optimal Environmental Protection and Environmental Kuznets Curve

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  • Vladimir K. Teles
  • Ronaldo A. Arraes

Abstract

This paper explores the link between an environmental policy and economic growth employing an extension of the Neoclassical Growth Model. We include a state equation to renewable natural resources, and consider natural resources as a component of the aggregate productivity. It is assumed that the change of the environmental regulations induces costs and that economic agents also derive some utility from stock capital accumulation via-a-vis environment. Using the Hopf bifurcation theorem, it can be shown that cyclical environmental policy strategies are optimal, providing a theoretical support to the Environmental Kuznets Curve

Suggested Citation

  • Vladimir K. Teles & Ronaldo A. Arraes, 2004. "Optimal Environmental Protection and Environmental Kuznets Curve," Econometric Society 2004 Latin American Meetings 60, Econometric Society.
    • Handle: RePEc:ecm:latm04:60
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    References listed on IDEAS

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    More about this item

    Keywords

    Neoclassical Growth Model; Environmental Kuznets Curve; Hopf Bifurcation Theorem; Limit Cycles.;
    All these keywords.

    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
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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