The timing of pollution abatement investments and the business cycle: an international comparison
Pieter Gautier () and
Marjan Hofkes ()
Additional contact information
M. Bouman: Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics
No 33, Serie Research Memoranda from VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics
In this paper we develop a simple equilibrium business-cycle model for an economy with both clean-and dirty-producing plants. We derive that the optimal timing of cleaning the production process is during a slowdown of the economy. Due to external effects and market failures the timing of pollution abatement investments is not expected to be optimal in the real world. We test the optimality of the timing of those investments with data for Germany, the Netherlands and the U.S.A. It appears that for more than 25 percent of the sectors pollution abatement investments show counter-cyclical behaviour, while in only one sector these investments are pro-cyclical.
Keywords: business-cycle model; pollution abatement investments; cleaning production; environmental regulation (search for similar items in EconPapers)
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:vua:wpaper:1995-33
Access Statistics for this paper
More papers in Serie Research Memoranda from VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics Contact information at EDIRC.
Bibliographic data for series maintained by R. Dam ().