Technological Progress, Time Perception and Environmental Sustainability

Evangelos Dioikitopoulos, Sugata Ghosh () and Eugenia Vella
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Sugata Ghosh: Department of Economics amd Finanace, Brunel University London

No 2016002, Working Papers from The University of Sheffield, Department of Economics

Abstract: This paper explores the relationship among technological progress, environment and growth by combining endogenous efficiency of public abatement with endogenous discounting. Our model can feature two different balanced growth paths corresponding to different levels of environmental quality, which remains constant in the long-run although the economy grows. The multiple equilibria point to a non-monotonic relationship among technological progress, growth and the environment, as observed in the data. A Ramsey planner can implement the good equilibrium; however, under a positive technology shock, the economy achieves higher long-run growth at the cost of lower environmental quality (even if agents value the environment highly). This finding could help us explain why some advanced economies may not succeed in cleaning the environment effectively.

Keywords: Time preference; growth; environmental quality; Fiscal policy; technological progress (search for similar items in EconPapers)
JEL-codes: D90 E21 E62 H31 O44 Q28 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2016
New Economics Papers: this item is included in nep-dge, nep-env, nep-fdg, nep-gro, nep-ino and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://www.sheffield.ac.uk/economics/research/serps/articles/2016_002 First version, January 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shf:wpaper:2016002

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