A Dynamic Analysis of the Income-Pollution Relationship in a Two-country Setting
Eleftherios Filippiadis and
Anastasia Litina ()
Additional contact information
Eleftherios Filippiadis: Department of Economics, University of Macedonia
Discussion Paper Series from Department of Economics, University of Macedonia
This research explores the presence of the income-pollution relationship in a dynamic two- country setting. We argue that the initial conditions of an economy, as described by its initial stock of physical capital, its total factor productivity, and the degree of environmental aware- ness, are critical determinants of the income-pollution paths. More importantly, these initial conditions have a more pronounced eÂ¤ect in a world where economies interact with one another and transboundary and global pollutants are aÂ¤ecting more than one country. We show that, in the presence of pollution externalities between two countries, the income-pollution paths these countries follow depend on the stage of development of each country, on their relative and absolute productivities, on the degree of environmental awareness and on the transbound- ary nature of the pollutants. In a two-country setting with pollution externalities even more complex patterns may arise compared to single country models, thereby conÂ…rming the non- linear eÂ¤ect of growth on environmental outcomes. It is shown that even small asymmetries span income-pollution relationships that are signiÂ…cantly diÂ¤erent than the prescribed inverted U-shaped patterns.
Keywords: Environmental Kuznets Curve; Environmental poverty trap; TFP asymmetry; Transboundary pollutants. (search for similar items in EconPapers)
JEL-codes: O13 Q01 Q56 (search for similar items in EconPapers)
Date: 2021-01, Revised 2021-01
New Economics Papers: this item is included in nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:mcd:mcddps:2021_01
Access Statistics for this paper
More papers in Discussion Paper Series from Department of Economics, University of Macedonia
Bibliographic data for series maintained by Theodore Panagiotidis () and Anastasia Litina ().