Economic dynamics with renewable resources and pollution

This article considers a two-sector economy with externalities. In particular, the analysis involves an industrial sector whose polluting production activities have negative effects on the regeneration of a natural resource in the other sector. Without convexity or supermodularity, we prove that the...

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Bibliographic Details
Published inMathematical social sciences Vol. 108; pp. 14 - 26
Main Authors Dam, My, Ha-Huy, Thai, Le Van, Cuong, Nguyen, Thi Tuyet Mai
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.11.2020
Elsevier Science Ltd
Elsevier
Subjects
Convergence
Economic conditions
Economic development
Economics and Finance
Humanities and Social Sciences
Impact analysis
Pollution
Pollution externality
Ramsey model
Renewable resources
Two-sector economy
Ramsey model
Two-sector economy
Pollution externality
Renewable resources
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Summary:This article considers a two-sector economy with externalities. In particular, the analysis involves an industrial sector whose polluting production activities have negative effects on the regeneration of a natural resource in the other sector. Without convexity or supermodularity, we prove that the economy evolves to increase the net gain of stock (a similar notion to the net gain of investment in Kamihigashi and Roy (2007)), and establish the conditions ensuring the convergence of the economy in the long run. •A two-sector economy: production sector and exploitation of renewable resources sector.•Analysis of the notion net gain of stock.•Characterization of the global dynamic and conditions for the convergence are given.
ISSN:0165-4896
1879-3118
DOI:10.1016/j.mathsocsci.2020.08.002