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The Green Solow model. (English) Zbl 1195.91126
Summary: We argue that a key empirical finding in environmental economics – the Environmental Kuznets Curve (EKC) – and the core model of modern macroeconomics – the Solow model – are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. We explain why current methods for estimating an EKC are likely to fail; provide an alternative empirical method directly tied to our theory; and estimate our model on carbon emissions from 173 countries over the 1960–1998 period.

91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91B64 Macroeconomic theory (monetary models, models of taxation)
Full Text: DOI
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