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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.

MSC:
91B76 Environmental economics (natural resource models, harvesting, pollution, etc.)
91B64 Macroeconomic theory (monetary models, models of taxation)
Software:
Greenstone
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