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Pollution Abatement as a Source of Stabilisation and Long-Run Growth

By Dimitrios Varvarigos and Theodore Palivos

Abstract

In a two-period overlapping generations model with production, we consider\ud the damaging impact of environmental degradation on health and,\ud consequently, life expectancy. The government’s involvement on policies of\ud environmental preservation proves crucial for both the economy’s short-term\ud dynamics and its long-term prospects. Particularly, an active policy of\ud pollution abatement emerges as an important engine of long-run economic\ud growth. Furthermore, by eliminating the occurrence of limit cycles, pollution\ud abatement is also a powerful source of stabilisation

Topics: Growth, Cycles, Environmental quality, Pollution abatement
Publisher: Dept. of Economics, University of Leicester
Year: 2010
OAI identifier: oai:lra.le.ac.uk:2381/9246

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