Pollution and Resource Extraction: Do they Matter for the Dynamics of Growth?

George Economides () and Apostolis Philippopoulos ()

No CESifo Working Paper No. 361, CESifo Working Paper Series from CESifo Group Munich

Abstract: This paper shows that whether pollution occurs as a by-product of economic activity (which is supposed to be the case in DCs), or as resource extraction (which is supposed to be the case in LDCs), matters for the dynamics of the optimal growth-environment-policy link. The context is a dynamic general equilibrium model of endogenous growth, in which private agents treat natural resources as a public good and the government chooses second-best environmental policy. We show that resource extraction can lead to indeterminacy, i.e. many different equilibrium transition paths. This can partly explain the observed persistent differences in growth among LDCs with similar fundamentals and endowments.

Keywords: Pollution and resource extraction; growth; dynamics; second-best policy (search for similar items in EconPapers)
JEL-codes: D90 H40 Q30 (search for similar items in EconPapers)
Date: 2000
View list of references

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo_wp361.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_361

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().