Local Stability and Uniqueness of Sustainable Equilibria in a Modified Romer Model with Dirtiness
Author | : Giovanni Bella |
Publisher | : |
Total Pages | : 0 |
Release | : 2008 |
ISBN-10 | : OCLC:1376533676 |
ISBN-13 | : |
Rating | : 4/5 (76 Downloads) |
Book excerpt: The aim of this paper is to analyse the link between environmental quality and economic growth, in a Romer-type economy characterised by dirty emissions in the production process. This work is close to Aghion-Howitt (1998) with some more general specifications, in particular regarding the structure of preferences and the technological sector. We also deeply study the transitional dynamics of this economy towards the steady state, and conclude that a determinate saddle path sustainable equilibrium can be reached even in presence of a long run positive level of polluting emissions, thanks to a growing level of new home-made inventories, without whom some indeterminacy problems are likely to emerge.