Economic growth and abatement activities in a stochastic environment: a multi-objective approach

Simone Marsiglio and Davide La Torre

Annals of Operations Research, 2018, vol. 267, issue 1, No 16, 334 pages

Abstract: Abstract We analyze the effect of uncertainty on economic growth and environmental quality in a concave stochastic bicriteria dynamic problem, solved by means of scalarization techniques and the Hamilton–Jacobi–Bellman equation. Specifically, we focus on an endogenous growth model with purposive abatement activities, where environmental quality, subject to random shocks, is merely a source of utility and does not play any productive role. We show that even in the absence of direct (environmental) productivity effects, along the optimal path production results enhanced by an indirect productivity effect, which transforms environmental quality into the engine of growth. However, this does not prevent uncertainty to dampen economic and environmental performance, leading to a lower social welfare than in a deterministic framework.

Keywords: Economic growth; Environmental quality; Uncertainty; Multiobjective; Optimization (search for similar items in EconPapers)
JEL-codes: O40 O41 Q50 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://link.springer.com/10.1007/s10479-016-2357-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:267:y:2018:i:1:d:10.1007_s10479-016-2357-3

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-016-2357-3

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().