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Dissimilar Relations Between Income and Environmental Quality for Open Economies in a Growth Model

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  • Bidisha Lahiri

    (Department of Economics and Legal Studies, Spears School of Business, Oklahoma State University)

Abstract

This paper demonstrates that two economies identical in all respects other than the timing of their growth would experience different income-environment outcomes in an integrated open economy scenario. This happens because the rental on international capital flows is repatriated to the country of origin but the pollution affects the country of production. This result is distinct from the standard convergence result for identical economies. This asymmetric outcome is then analyzed in terms of the scale, composition, and intensity effects known to underlie the Environmental Kuznets Curve relation.

Suggested Citation

  • Bidisha Lahiri, 2017. "Dissimilar Relations Between Income and Environmental Quality for Open Economies in a Growth Model," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 43(1), pages 104-127, January.
    • Handle: RePEc:pal:easeco:v:43:y:2017:i:1:d:10.1057_eej.2015.3
    DOI: 10.1057/eej.2015.3
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