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Environmental consciousness, economic growth, and macroeconomic instability

Jhy-yuan Shieh, Jhy-hwa Chen, Shu-hua Chang and Ching-chong Lai

International Review of Economics & Finance, 2014, vol. 34, issue C, 151-160

Abstract: This paper develops an endogenous growth model to examine the linkages between environmental consciousness and economic growth. It is found that macroeconomic instability can arise in a simple AK-type growth model when the pollution externality is present only in the agent's utility function. It is also found that the impact of environmental consciousness on the economic growth rate is ambiguous. The economic systems (a decentralized versus centralized economy) and the ecological evolution (the specific pollution growth rate) are two crucial factors that determine the relationship between environmental consciousness and economic growth.

Keywords: Endogenous growth; Environmental consciousness; Macroeconomic instability; Pollution (search for similar items in EconPapers)
JEL-codes: O40 Q20 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.iref.2014.08.006

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