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Abrupt Damages and Sustainability

Can Mavi

Revue d'économie politique, 2019, vol. 129, issue 5, 861-875

Abstract: In this paper, I show that the amount of the environmental damage due to abrupt events can be important for the sustainability of an economy. When the economy faces endogenous limit cycles or unstable behavior for a large parameter region for environmental damage, the Sustainable Development criterion, implying a non-decreasing path for utility is compromised. In addition, total factor productivity improvements are shown to help an economy respecting the Sustainable Development Criterion by avoiding limit cycles and unstable behavior in the long run. Classification JEL : O13, D81, Q2, Q54

Keywords: Abrupt damage; Occurrence Hazard; Limit Cycles; Hopf Bifurcation; TFP Growth (search for similar items in EconPapers)
JEL-codes: D81 O13 Q2 Q54 (search for similar items in EconPapers)
Date: 2019
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