Environmental regulation and economic cycles

George Halkos, Papageorgiou J. George, Halkos G. Emmanuel and Papageorgiou G. John

Economic Analysis and Policy, 2019, vol. 64, issue C, 172-177

Abstract: This paper examines economic cycles that do not depend on exogenous economic actions. More precisely, the paper develops a positive model of government behavior in order to define the intertemporal fiscal policies that are optimal for a country and which, determine both the optimal budget level and the optimal level of environmental quality. For this purpose, we establish an optimal control model involving intertemporal subsidy strategies characteristically used by an authoritarian government similar to those found in central Europe. It will be shown that by applying the Hopf bifurcation theorem,a cyclical strategy – that is, waves of regulation, environmental subsidies alternating with deregulation and cuts in social programs – may represent an optimal policy.

Keywords: Budget; Environmental resources; Subsidies; Hopf bifurcation; Optimal control (search for similar items in EconPapers)
JEL-codes: C02 C61 E62 H23 H61 Q50 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: Environmental regulation and economic cycles (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:64:y:2019:i:c:p:172-177

DOI: 10.1016/j.eap.2019.07.005

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