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Economic Growth and the Environment: A Theoretical Reappraisal

Maxime Menuet, Alexandru Minea, Patrick Villieu () and Anastasios Xepapadeas

No 2031, DEOS Working Papers from Athens University of Economics and Business

Abstract: The relationship between economic growth and the environment is at the core of the theoretical and empirical researches since at least thirty years. This paper shows that a small-dimension ecological growth model can lead to a great diversity of relationships between pollution and growth, including the popular environmental Kuznets curve (EKC) and logistic curve (ELC). We exhibit multiple equilibria and complex local and global dynamics resulting in potential indeterminacy or long-lasting pollution cycles. Furthermore, our model reveals an ecological poverty trap associated with a possible irreversibility of the environmental degradation. Interestingly, our findings do not resort on some exogenous technological breaks but result from the endogenous interaction between households� saving behaviour and the natural resources' law of motion.

Keywords: Growth; Environment; Bifurcation; Endogenous Cycles; Poverty Traps; Pollution (search for similar items in EconPapers)
JEL-codes: E32 O44 Q50 (search for similar items in EconPapers)
Date: 2020-08-27
New Economics Papers: this item is included in nep-env, nep-gro, nep-mac and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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