Environmental Macroeconomics: A critical literature review and future empirical research directions

George Halkos and Epameinondas Paizanos

MPRA Paper from University Library of Munich, Germany

Abstract: In the existing literature much attention has been given to the toolbox of regulatory policy instruments at the disposal of policy makers for addressing environmental concerns. Microeconomic treatment of environmental policy considers the optimal allocation of a given scale of resource flow within the economy, but neglects the scale and composition of economic activity relative to the ecosystem that supports it. An ecological approach to macroeconomics requires the appreciation of physical constraints to economic growth. This paper presents the theoretical underpinnings and the empirical findings of the literature on the link between economic growth and environmental quality, as well as of the relationship between fiscal policy and environmental degradation, by reviewing the relevant literature. The empirical findings on both relationships are not robust and are therefore inconclusive. The paper provides conclusions and directions for future research which may assist to solve this ambiguity on the examined relationships.

Keywords: Environmental Macroeconomics; Economic growth; Natural resources; Fiscal policy. (search for similar items in EconPapers)
JEL-codes: E62 P28 Q01 Q28 Q32 Q56 (search for similar items in EconPapers)
Date: 2015-10
New Economics Papers: this item is included in nep-env, nep-mac and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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