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The Environmental Kuznets Curve And The Structural Change Hypothesis, Simone Marsiglio, Alberto Ansuategi, Maria Carmen Gallastegui
The Environmental Kuznets Curve And The Structural Change Hypothesis, Simone Marsiglio, Alberto Ansuategi, Maria Carmen Gallastegui
Faculty of Business - Papers (Archive)
We provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted U-shaped income-pollution relationships. Differently from previous research which mainly focuses on empirical, static or general equilibrium models, we develop a standard balanced growth path (BGP) analysis. We show that along the BGP equilibrium an inverted U-shaped income-pollution relationship may occur as a response to structural changes, but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter. Moreover, we show that the negative relationship between income and pollution can only be a transitory …