Environmental protection and economic growth

Vladimir Teles () and Ronaldo Arraes

No 194, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: This paper explores the link between environmental policy and economic growth by employing an extension of the AK Growth Model. We include a state equation for renewable natural resources. We assume that the change in environmental regulations induces costs and that economic agents also derive some utility from capital stock accumulation vis-`a-vis the environment. Using the Hopf bifurcation theorem, we show that cyclical environmental policy strategies are optimal, providing theoretical support for the Environmental Kuznets Curve.

Date: 2009-08-24
New Economics Papers: this item is included in nep-dge, nep-ene, nep-env and nep-fdg
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Related works:
Working Paper: ENVIRONMENTAL PROTECTION AND ECONOMIC GROWTH (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:194

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