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Economic dynamics with renewable resources and pollution

Author

Listed:
  • My Dam

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay)

  • Thai Ha-Huy

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay, TIMAS - Institute of Mathematics and Applied Science)

  • Cuong Le Van

    (IPAG Business School, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, TIMAS - Institute of Mathematics and Applied Science)

  • Thi Tuyet Mai Nguyen

    (Thuongmai University - Partenaires INRAE, UP1 - Université Paris 1 Panthéon-Sorbonne)

Abstract

This article considers a two-sector economy with externalities. In particular, the analysis involves an industrial sector whose polluting production activities have negative effects on the regeneration of a natural resource in the other sector. Without convexity or supermodularity, we prove that the economy evolves to increase the net gain of stock (a similar notion to the net gain of investment in Kamihigashi and Roy (2007)), and establish the conditions ensuring the convergence of the economy in the long run.

Suggested Citation

  • My Dam & Thai Ha-Huy & Cuong Le Van & Thi Tuyet Mai Nguyen, 2020. "Economic dynamics with renewable resources and pollution," PSE-Ecole d'économie de Paris (Postprint) hal-04131071, HAL.
    • Handle: RePEc:hal:pseptp:hal-04131071
    DOI: 10.1016/j.mathsocsci.2020.08.002
    Note: View the original document on HAL open archive server: https://paris1.hal.science/hal-04131071
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    References listed on IDEAS

    as
    1. Ayong Le Kama, Alain D., 2001. "Sustainable growth, renewable resources and pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1911-1918, December.
    2. Thai Ha‐Huy & Cuong Le Van & Thi‐Do‐Hanh Nguyen, 2020. "Optimal growth when consumption takes time," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1442-1461, September.
    3. Le Van, Cuong & Morhaim, Lisa, 2002. "Optimal Growth Models with Bounded or Unbounded Returns: A Unifying Approach," Journal of Economic Theory, Elsevier, vol. 105(1), pages 158-187, July.
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    5. Cuong Le Van & Rose-Anne Dana, 2003. "Dynamic Programming in Economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00119098, HAL.
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    7. Takashi Kamihigashi & Santanu Roy, 2006. "Dynamic optimization with a nonsmooth, nonconvex technology: the case of a linear objective function," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(2), pages 325-340, October.
    8. Le Van, Cuong & Schubert, Katheline & Nguyen, Tu Anh, 2010. "With exhaustible resources, can a developing country escape from the poverty trap?," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2435-2447, November.
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    10. Rabah Amir, 2005. "Supermodularity and Complementarity in Economics: An Elementary Survey," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 636-660, January.
    11. Le Van, Cuong & Vailakis, Yiannis, 2005. "Recursive utility and optimal growth with bounded or unbounded returns," Journal of Economic Theory, Elsevier, vol. 123(2), pages 187-209, August.
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    15. Le Van, Cuong & Schubert, Katheline & Nguyen, Tu Anh, 2010. "With exhaustible resources, can a developing country escape from the poverty trap?," Journal of Economic Theory, Elsevier, vol. 145(6), pages 2435-2447, November.
    16. Cuong Le Van & Rose-Anne Dana, 2003. "Dynamic Programming in Economics," Post-Print halshs-00119098, HAL.
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    18. Rabah Amir, 2005. "Supermodularity and Complementarity in Economics: An Elementary Survey," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 636-660, January.
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    Cited by:

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    2. Bosi, Stefano & Ha-Huy, Thai, 2023. "A multidimensional, nonconvex model of optimal growth," Journal of Mathematical Economics, Elsevier, vol. 109(C).

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    More about this item

    Keywords

    Two-sector economy; Renewable resources; Pollution externality; Ramsey model; renewable resources; pollution externality;
    All these keywords.

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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