Working PaperFirst publicationPublished version DOI: 10.48548/pubdata-1257

Optimal dynamic scale and structure of a multi-pollution economy

Preview & Downloads

Chronological data

Date of first publication2007-08-20
Date of publication in PubData 2024-08-23

Language of the resource

English

Related external resources

Part of ISSN: 1860-5508
Working paper series in economics

Related PubData resources

Publisher

Other contributors

Abstract

We analyze the optimal dynamic scale and structure of a two-sectoreconomy, where each sector produces one consumption good and one specific pollutant. Both pollutants accumulate at di_erent rates to stocks which damage the natural environment. This acts as a dynamic driving force for the economy. Our analysis shows that along the optimal time-path (i) the overall scale of economic activity may be less than maximal; (ii) the time scale of economic dynamics (change of scale and structure) is mainly determined by the lifetime of pollutants, their harmfulness and the discount rate; and (iii) the optimal control of economic scale and structure may be non-monotonic. These results raise important questions about the optimal design of environmental policies.

Keywords

Emission; Control; Stock Pollution; Ökonomie; Ökologie; Emission; Wertpapieremission

Number of the series contribution

50

Faculty / department

More information

DDC

330 :: Wirtschaft

Creation Context

Research