Pollution Abatement as a Source of Stabilisation and Long-Run Growth
Theodore Palivos and
Dimitrios Varvarigos ()
No 11/04, Discussion Papers in Economics from Department of Economics, University of Leicester
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.
Keywords: Growth; Cycles; Environmental quality; Pollution abatement (search for similar items in EconPapers)
JEL-codes: O41 Q56 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env and nep-fdg
Date: 2010-10, Revised 2010-10
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Working Paper: Pollution Abatement as a Source of Stabilisation and Long-Run Growth (2010)
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