0000000000147207
AUTHOR
J. Aznar-márquez
Environmental pollution, sustained growth, and sufficient conditions for sustainable development
Abstract Sustainability and optimality are the two main issues discussed in environmental economics and economic growth theory. This paper studies economic growth in the presence of two environmental externalities. The first one is local and gives account of the marginal damage from the emissions flow. The second one is aggregate, or global, and relates to the extreme damage which may happen if the accumulated stock of pollutants is on the threshold of a worldwide catastrophe. In this context, the decentralized equilibrium is inefficient and economic growth unsustainable. However, we find and completely characterize the socially optimal equilibrium, which shows that sustained growth is feas…
Endogenous Growth, Capital Utilization and Depreciation
We study the one sector model of growth when a linear production technology is combined with adjustment costs and a technology for capital maintenance. Agents are allowed to under-use the installed capital and to vary the depreciation rate. This economy decides endogenously how much resources devotes to the accumulation of new capital and how much to maintenance and repair activities. We find as striking results that the long-run depreciation and capital utilization rates are positively related to the population growth rate, and that both depend negatively on the intial conditions. The long-run growth rate appears positively correlated with the depreciation rate.
Sustainable growth and environmental catastrophes
Abstract In the standard AK growth model we introduce the threat of an ecological catastrophe and study the consequences for the economic variables in the long-run. We extend the basic framework by considering two environmental externalities: the first one is local and gives account of the marginal damage from emissions flow; the second one is aggregate, or global, and relates to the extreme damage which may happen if the accumulated stock of pollutants is on the threshold of a worldwide catastrophe. In this context dominated by market failures, we focus on the socially optimal solution and the search of conditions for sustainability. We identify the efficient balanced growth path, which ma…