Dissimilar Relations Between Income and Environmental Quality for Open Economies in a Growth Model

Bidisha Lahiri

Eastern Economic Journal, 2017, vol. 43, issue 1, No 7, 104-127

Abstract: Abstract This paper demonstrates that two economies identical in all respects other than the timing of their growth would experience different income-environment outcomes in an integrated open economy scenario. This happens because the rental on international capital flows is repatriated to the country of origin but the pollution affects the country of production. This result is distinct from the standard convergence result for identical economies. This asymmetric outcome is then analyzed in terms of the scale, composition, and intensity effects known to underlie the Environmental Kuznets Curve relation.

Keywords: EKC; environmental policy; capital mobility; open economy; Q56; O44; F43 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1057/eej.2015.3

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