IDEAS home Printed from https://ideas.repec.org/p/mcd/mcddps/2010_13.html
   My bibliography  Save this paper

Pollution Abatement as a Source of Stabilisation and Long-Run Growth

Author

Abstract

In a two-period overlapping generations model with production, we consider the damaging impact of environmental degradation on health and, consequently, life expectancy. The government’s involvement on policies of environmental preservation proves crucial for both the economy’s short-term dynamics and its long-term prospects. Particularly, an active policy of pollution abatement emerges as an important engine of long-run economic growth. Furthermore, by eliminating the occurrence of limit cycles, pollution abatement is also a powerful source of stabilisation.

Suggested Citation

  • Theodore Palivos & Dimitrios varvarigos, 2010. "Pollution Abatement as a Source of Stabilisation and Long-Run Growth," Discussion Paper Series 2010_13, Department of Economics, University of Macedonia, revised Sep 2010.
  • Handle: RePEc:mcd:mcddps:2010_13
    as

    Download full text from publisher

    File URL: http://aphrodite.uom.gr/econwp/pdf/dp132010.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Mariani, Fabio & Pérez-Barahona, Agustín & Raffin, Natacha, 2010. "Life expectancy and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 34(4), pages 798-815, April.
    3. Aslanidis, Nektarios & Xepapadeas, Anastasios, 2008. "Regime switching and the shape of the emission-income relationship," Economic Modelling, Elsevier, vol. 25(4), pages 731-739, July.
    4. Azomahou, Theophile & Laisney, Francois & Nguyen Van, Phu, 2006. "Economic development and CO2 emissions: A nonparametric panel approach," Journal of Public Economics, Elsevier, vol. 90(6-7), pages 1347-1363, August.
    5. Daniel L. Millimet & John A. List & Thanasis Stengos, 2003. "The Environmental Kuznets Curve: Real Progress or Misspecified Models?," The Review of Economics and Statistics, MIT Press, vol. 85(4), pages 1038-1047, November.
    6. Junxi Zhang, 1999. "Environmental sustainability, nonlinear dynamics and chaos," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(2), pages 489-500.
    7. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September.
    8. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 353-377.
    9. Bhattacharya, Joydeep & Qiao, Xue, 2005. "Public and Private Expenditures on Health in a Growth Model," Staff General Research Papers Archive 12378, Iowa State University, Department of Economics.
    10. Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C.S. & Jansson, Bengt-Owe & Levin, Simon & Mäler, Karl-Göran & Perrings, Charles & Pimentel, David, 1996. "Economic growth, carrying capacity, and the environment," Environment and Development Economics, Cambridge University Press, vol. 1(1), pages 104-110, February.
    11. Seegmuller, Thomas & Verchere, Alban, 2004. "Pollution as a source of endogenous fluctuations and periodic welfare inequality in OLG economies," Economics Letters, Elsevier, vol. 84(3), pages 363-369, September.
    12. Larry E. Jones & Rodolfo E. Manuelli, 2001. "Endogenous Policy Choice: The Case of Pollution and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 369-405, July.
    13. Kiminori Matsuyama, 1999. "Growing Through Cycles," Econometrica, Econometric Society, vol. 67(2), pages 335-348, March.
    14. Béatrice Roussillon & Paul Schweinzer, 2010. "Efficient emissions reduction," Economics Discussion Paper Series 1004, Economics, The University of Manchester.
    15. Chakraborty, Shankha, 2004. "Endogenous lifetime and economic growth," Journal of Economic Theory, Elsevier, vol. 116(1), pages 119-137, May.
    16. Tetsuo Ono, 2003. "Environmental tax policy in a model of growth cycles," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(1), pages 141-168, August.
    17. Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
    18. George Economides & Apostolis Philippopoulos, 2008. "Growth enhancing policy is the means to sustain the environment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 207-219, January.
    19. Hartman, Richard & Kwon, O-Sung, 2005. "Sustainable growth and the environmental Kuznets curve," Journal of Economic Dynamics and Control, Elsevier, vol. 29(10), pages 1701-1736, October.
    20. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November.
    21. Theodore Palivos & Dimitrios Varvarigos, 2010. "Education and growth: A simple model with complicated dynamics," International Journal of Economic Theory, The International Society for Economic Theory, vol. 6(4), pages 367-384, December.
    22. Donohoe, Martin, 2003. "Causes and health consequences of environmental degradation and social injustice," Social Science & Medicine, Elsevier, vol. 56(3), pages 573-587, February.
    23. Roger Perman & David I. Stern, 2003. "Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(3), pages 325-347, September.
    24. Costanza, Robert, 1995. "Economic growth, carrying capacity, and the environment," Ecological Economics, Elsevier, vol. 15(2), pages 89-90, November.
    25. Hilton, F. G. Hank & Levinson, Arik, 1998. "Factoring the Environmental Kuznets Curve: Evidence from Automotive Lead Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 35(2), pages 126-141, March.
    26. Stokey, Nancy L, 1998. "Are There Limits to Growth?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lamperti, Francesco & Napoletano, Mauro & Roventini, Andrea, 2020. "Green Transitions And The Prevention Of Environmental Disasters: Market-Based Vs. Command-And-Control Policies," Macroeconomic Dynamics, Cambridge University Press, vol. 24(7), pages 1861-1880, October.
    2. Constant, Karine & Davin, Marion, 2021. "Pollution, children’s health and the evolution of human capital inequality," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 9-25.
    3. Xavier Pautrel, 2018. "Environmental Policy and Health in the Presence of Labor Market Imperfections," TEPP Working Paper 2018-09, TEPP.
    4. Xavier Pautrel, 2017. "Environment, Health and Labor Market," Working Papers 2017.36, Fondazione Eni Enrico Mattei.
    5. Constant, Karine, 2019. "Environmental policy and human capital inequality: A matter of life and death," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 134-157.
    6. Raffin, Natacha & Seegmuller, Thomas, 2014. "Longevity, pollution and growth," Mathematical Social Sciences, Elsevier, vol. 69(C), pages 22-33.
    7. Natacha Raffin & Thomas Seegmuller, 2017. "The Cost of Pollution on Longevity, Welfare and Economic Stability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 683-704, November.
    8. Wang, Min & Zhao, Jinhua & Bhattacharya, Joydeep, 2015. "Optimal health and environmental policies in a pollution-growth nexus," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 160-179.
    9. Aditya Goenka & Saqib Jafarey & William Pouliot, 2012. "Pollution, Mortality and Optimal Environmental Policy," Discussion Papers 12-05, Department of Economics, University of Birmingham.
    10. Fabio Mariani & Agustin Perez Barahona & Natacha Raffin, 2019. "Population and the environment: the role of fertility, education and life expectancy," LIDAM Discussion Papers IRES 2019008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. Nguyen Than Dao & Ottmar Edenhofer, 2014. "On the Fiscal Strategies of Escaping Poverty-Environment Traps (and) Towards Sustainable Growth," CESifo Working Paper Series 4865, CESifo.
    12. Dimitrios Varvarigos, 2013. "Endogenous Cycles and Human Capital," Discussion Papers in Economics 13/18, Division of Economics, School of Business, University of Leicester.
    13. Boucekkine, Raouf & Seegmuller, Thomas & Venditti, Alain, 2021. "Advances in growth and macroeconomic dynamics: In memory of Carine Nourry," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 1-6.
    14. Dimitrios Varvarigos, 2017. "Endogenous cycles and human capital," Journal of Economics, Springer, vol. 120(1), pages 31-45, January.
    15. Lucas Bretschger & Alexandra Vinogradova, 2017. "Human Development at Risk: Economic Growth with Pollution-Induced Health Shocks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 481-495, March.
    16. Dugan, Anna & Prskawetz, Alexia & Raffin, Natacha, 2022. "The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey," ECON WPS - Working Papers in Economic Theory and Policy 01/2022, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    17. repec:hal:spmain:info:hdl:2441/14g286e42n8bl9is6h16b18kes is not listed on IDEAS
    18. Dao, Nguyen Thang & Edenhofer, Ottmar, 2018. "On the fiscal strategies of escaping poverty-environment traps towards sustainable growth," Journal of Macroeconomics, Elsevier, vol. 55(C), pages 253-273.
    19. Goenka, Aditya & Jafarey, Saqib & Pouliot, William, 2020. "Pollution, mortality and time consistent abatement taxes," Journal of Mathematical Economics, Elsevier, vol. 88(C), pages 1-15.
    20. Xiaomeng Zhang & Theodore Palivos & Xiangbo Liu, 2022. "Aging and automation in economies with search frictions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 35(2), pages 621-642, April.
    21. Karine Constant, 2015. "Environmental Policy and Inequality: A Matter of Life and Death," Working Papers halshs-01174052, HAL.
    22. Aloi, Marta & Tournemaine, Frederic, 2011. "Growth effects of environmental policy when pollution affects health," Economic Modelling, Elsevier, vol. 28(4), pages 1683-1695, July.
    23. Wei-Bin Zhang, 2015. "The Dynamics of Wealth, Environment and Land Value in a Three-Sector Growth Model," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 13(2), pages 197-228.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wagner, Martin, 2008. "The carbon Kuznets curve: A cloudy picture emitted by bad econometrics?," Resource and Energy Economics, Elsevier, vol. 30(3), pages 388-408, August.
    2. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
    3. Managi, Shunsuke, 2006. "Are there increasing returns to pollution abatement? Empirical analytics of the Environmental Kuznets Curve in pesticides," Ecological Economics, Elsevier, vol. 58(3), pages 617-636, June.
    4. Empora, Neophyta & Mamuneas, Theofanis P. & Stengos, Thanasis, 2020. "Output and pollution abatement in a U.S. state emission function," Environment and Development Economics, Cambridge University Press, vol. 25(1), pages 44-65, February.
    5. Goenka, Aditya & Jafarey, Saqib & Pouliot, William, 2020. "Pollution, mortality and time consistent abatement taxes," Journal of Mathematical Economics, Elsevier, vol. 88(C), pages 1-15.
    6. Roxana Pincheira & Felipe Zuniga, 2021. "Environmental Kuznets curve bibliographic map: a systematic literature review," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 1931-1956, April.
    7. Kijima, Masaaki & Nishide, Katsumasa & Ohyama, Atsuyuki, 2010. "Economic models for the environmental Kuznets curve: A survey," Journal of Economic Dynamics and Control, Elsevier, vol. 34(7), pages 1187-1201, July.
    8. Valeria Costantini & Chiara Martini, 2010. "A Modified Environmental Kuznets Curve for sustainable development assessment using panel data," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 10(1/2), pages 84-122.
    9. Stern, David I., 2014. "The Environmental Kuznets Curve: A Primer," Working Papers 249424, Australian National University, Centre for Climate Economics & Policy.
    10. Fabien Prieur, 2009. "The environmental Kuznets curve in a world of irreversibility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(1), pages 57-90, July.
    11. Neophyta Empora, 2017. "Air pollution spillovers and U.S. state productivity growth," University of Cyprus Working Papers in Economics 06-2017, University of Cyprus Department of Economics.
    12. Evangelos V. Dioikitopoulos & Sugata Ghosh & Eugenia Vella, 2016. "Technological Progress, Time Perception and Environmental Sustainability," Working Papers 2016002, The University of Sheffield, Department of Economics.
    13. Dimitrios Varvarigos & Intan Zanariah Zakaria, 2011. "Growth and Demographic Change: Do Environmental Factors Matter?," Discussion Papers in Economics 11/46, Division of Economics, School of Business, University of Leicester.
    14. David I. Stern, 2017. "The environmental Kuznets curve after 25 years," Journal of Bioeconomics, Springer, vol. 19(1), pages 7-28, April.
    15. Theodore Panayotou, 2000. "Economic Growth and the Environment," CID Working Papers 56A, Center for International Development at Harvard University.
    16. Nektarios Aslanidis & Susana Iranzo, 2009. "Environment and development: is there a Kuznets curve for CO2 emissions?," Applied Economics, Taylor & Francis Journals, vol. 41(6), pages 803-810.
    17. Maxime Menuet & Alexandru Minea & Patrick Villieu & Anastasios Xepapadeas, 2020. "Economic Growth and the Environment: A Theoretical Reappraisal," DEOS Working Papers 2031, Athens University of Economics and Business.
    18. Andreoni, James & Levinson, Arik, 2001. "The simple analytics of the environmental Kuznets curve," Journal of Public Economics, Elsevier, vol. 80(2), pages 269-286, May.
    19. Bartz, Sherry & Kelly, David L., 2008. "Economic growth and the environment: Theory and facts," Resource and Energy Economics, Elsevier, vol. 30(2), pages 115-149, May.
    20. Luzzati, T. & Orsini, M., 2009. "Investigating the energy-environmental Kuznets curve," Energy, Elsevier, vol. 34(3), pages 291-300.

    More about this item

    Keywords

    Growth; Cycles; Enviromental quality; Pollution Abatement.;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcd:mcddps:2010_13. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Theodore Panagiotidis or Anastasia Litina (email available below). General contact details of provider: http://www.uom.gr/index.php?tmima=3 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.