Reconsidering the interplay between endogenous growth and the Environmental Kuznets Curve

David Desmarchelier

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: This paper develops a very simple model of endogenous growth à la Lucas (1988) in which a representative household has to choose between environmental preservation and human capital accumulation. After computing analytically all possible trajectories, we point out that one of them depicts an inverted U-shape relationship between human capital (production) and pollution (i.e. an Environmental Kuznets Curve). If the economy follows the EKC trajectory, then a steady state is reached in the long run, indicating the incompatibility between endogenous growth and the EKC. Moreover, this simple framework allows to compute explicitly the initial value of the control variable. It is then proved that the optimal trajectory is the balanced growth path, not the EKC. Finally, we show that endogenous growth is possible, whatever the effect of pollution on the marginal utility of consumption.

Keywords: Endogenous growth; environmental Kuznets curve; human capital. (search for similar items in EconPapers)
JEL-codes: C61 O44 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env, nep-gro and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://beta.u-strasbg.fr/WP/2022/2022-03.pdf (application/pdf)

Related works:
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:ulp:sbbeta:2022-03

Access Statistics for this paper

More papers in Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg Contact information at EDIRC.
Bibliographic data for series maintained by ( this e-mail address is bad, please contact ).