Environmental Policy, Education and Growth: A Reappraisal when Lifetime Is Finite

Xavier Pautrel ()

No 42146, Economic Theory and Applications Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This article demonstrates that when finite lifetime is introduced in a Lucas (1988) growth model, the environmental policy may enhance growth both in the short- and the long-run, while pollution does not influence educational activities, labor supply is not elastic and human capital does not enter the utility function. This is because finite lifetime and the appearance of newborns at each date creates a turnover of generations which disconnects the aggregate consumption growth to the interest rate. We show that the shorter is the horizon, the greater the effect of the environmental policy on growth, because the higher the “generational turnover effect”. We also demonstrate that when time is not the single production factor in education, the environmental policy promotes growth only if time remains the predominant factor. Otherwise, the crowding-out effect of the tighter environmental policy dominates the “generational turnover effect” and growth diminishes. Finally, when the source of pollution is final output rather than physical capital and time is the single factor in education, the environmental does not affect growth in the steady-state, despite the “generational turnover effect”. Nevertheless, if the education good is introduced, the positive influence of the environmental policy appears again.

Pages: 32
Date: 2008-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://ageconsearch.umn.edu/record/42146/files/57-08.pdf (application/pdf)

Related works:
Journal Article: ENVIRONMENTAL POLICY, EDUCATION AND GROWTH: A REAPPRAISAL WHEN LIFETIME IS FINITE (2012)
Working Paper: Environmental policy, education and growth: A reappraisal when lifetime is finite (2009)
Working Paper: Environmental Policy, Education and Growth: A Reappraisal when Lifetime Is Finite (2008)
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:ags:feemet:42146

DOI: 10.22004/ag.econ.42146

Access Statistics for this paper

More papers in Economic Theory and Applications Working Papers from Fondazione Eni Enrico Mattei (FEEM) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().