In an endogenous growth model with human capital accumulation, we introduce non-renewable resources which cause flow pollution problems. In this set-up the negative external effect of pollution on productivity does not cause any distortions in the economy: The market economy will achieve the optimal extraction and growth rates. Consequently, emission taxes are unnecessary and, when introduced, will have no effect on the economy. The more important is the negative pollution externality, the larger will be the optimal long-run growth rate (which may be either positive or negative). In the case of a positive human capital externality, consumption in the market economy may approach zero in the long run, although positive consumption growth is socially optimal. Growth-enhancing policies do not necessarily cause a larger drain in the resource stock. Copyright Kluwer Academic Publishers 2000
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Volume (Year): 16 (2000) Issue (Month): 2 (June) Pages: 211-227 Download reference. The following formats are available: HTML
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Robson, Arthur J, 1980.
"Costly Innovation and Natural Resources,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 21(1), pages 17-30, February.
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Stokey, Nancy L, 1998.
"Are There Limits to Growth?,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
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