Over-exploitation of open-access natural resources and global indeterminacy in an economic growth model
Marcello Galeotti () and
Paolo Russu ()
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Marcello Galeotti: Dipartimento di Matematica per le Decisioni, Universita' degli Studi di Firenze
No 2009-05, Working Papers - Mathematical Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa
In this paper we use global analysis techniques to investigate an economic growth model with environmental negative externalities, giving rise to a three-dimensional dynamic system (the framework is the one introduced by Wirl (1997)). The dynamics of our model admits a locally attracting steady state which is, in fact, a poverty trap, coexisting with another steady state possessing saddle-point stability. Global dynamical analysis shows that, under some conditions on the parameters, if the economy state variables are close enough to those of the attractive point, then there exists a continuum of equilibrium orbits approaching the poverty trap and one orbit approaching the saddle-point.
Keywords: environmental externalities; indeterminacy; history versus expectations; global analysis of dynamic systems (search for similar items in EconPapers)
JEL-codes: C61 C62 E13 E32 O13 (search for similar items in EconPapers)
Pages: 27 pages
New Economics Papers: this item is included in nep-ene, nep-env and nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:flo:wpaper:2009-05
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