Anticipated Environmental Policy and Transitional Dynamics in an Endogenous Growth Model

Jhy-hwa Chen, Ching-chong Lai and Jhy-yuan Shieh

Environmental & Resource Economics, 2003, vol. 25, issue 2, 233-254

Abstract: This paper makes a new attempt toinvestigate how an anticipatedenvironmental policy governs the transitionaldynamics of an economy when pollutionexternality is taken into account. Themodeling strategy we use is an AK technologyendogenous growth framework with an endogenousleisure-labor choice. It is found that, unlikeinelastic labor supply framework, a rise inpublic abatement expenditure will stimulate thebalanced economic growth rate. It is alsofound that public abatement technology plays animportant role in determining the transitionaladjustment of the economic growth rate inresponse to a pre-announced environmentalpolicy. Copyright Kluwer Academic Publishers 2003

Keywords: endogenous growth; elastic labor supply; pollution; public abatement (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (12)

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DOI: 10.1023/A:1023976428714

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