Over-exploitation of open-access natural resources and global indeterminacy in an economic growth model

Angelo Antoci (), Marcello Galeotti () and Paolo Russu
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Angelo Antoci: Universita' degli Studi di Sassari
Marcello Galeotti: Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze
Paolo Russu: Universita' degli Studi di Sassari

No 2009-05, DiMaD Working Papers from Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze

Abstract: In this paper we use global analysis techniques to investigate an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997)). The dynamics of our model admits a locally attracting steady state which is, in fact, a poverty trap, coexisting with another steady state possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, if the economy state variables are close enough to those of the attractive point, then there exists a continuum of equilibrium orbits approaching the poverty trap and one orbit approaching the saddle-point.

Keywords: environmental externalities; indeterminacy; history versus expectations; global analysis of dynamic systems (search for similar items in EconPapers)
JEL-codes: C61 C62 E13 E32 O13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene, nep-env and nep-fdg
Date: 2009-10
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Persistent link: http://EconPapers.repec.org/RePEc:flo:wpaper:2009-05

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