Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171477
Authors: 
Egli, Hannes
Steger, Thomas M.
Year of Publication: 
2005
Series/Report no.: 
Economics Working Paper Series 04/33
Abstract: 
We set up a simple dynamic macroeconomic model with (i) polluting consump- tion and a preference for a clean environment, (ii) increasing returns in abate- ment giving rise to an EKC and (iii) sustained growth resulting from a linear final-output technology. The model captures two sorts of market failures caused by external effects associated with consumption and environmental effort. This model is employed to investigate the determinants of the turning point and the (relative) effectiveness of different public policy measures aimed at a reduction of the environmental burden. Moreover, the model offers a potential explana- tion of an N-shaped pollution-income relation. Finally, it is shown that the model is compatible with most empirical regularities on economic growth and the environment.
Subjects: 
Environmental Kuznets Curve
Pollution
Abatement
External Ef- fects
Economic Growth
Public Policy
JEL: 
Q5
O4
Document Type: 
Working Paper

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