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The Environmental Kuznets Curve and the Structural Change Hypothesis

Simone Marsiglio (), Alberto Ansuategi and Maria Carmen Gallastegui ()
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Maria Carmen Gallastegui: University of the Basque Country

Environmental & Resource Economics, 2016, vol. 63, issue 2, No 4, 265-288

Abstract: Abstract We provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted U-shaped income–pollution relationships. Differently from previous research which mainly focuses on empirical, static or general equilibrium models, we develop a standard balanced growth path (BGP) analysis. We show that along the BGP equilibrium an inverted U-shaped income–pollution relationship may occur as a response to structural changes, but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter. Moreover, we show that the negative relationship between income and pollution can only be a transitory phenomenon, and in the long run pollution will increase as income rises, generating overall an N-shaped pattern.

Keywords: Environmental Kuznets curve; Economic growth; Structural change (search for similar items in EconPapers)
JEL-codes: O40 O41 Q50 Q56 (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s10640-015-9942-9

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