Economic dynamics with renewable resources and pollution

My Dam (1) , Thai Ha-Huy (1, 2) , Cuong Le Van (3, 4, 5, 2) , Thi Tuyet Mai Nguyen (6, 7)

1 EPEE - Centre d'Etudes des Politiques Economiques
2 TIMAS - Institute of Mathematics and Applied Science
3 IPAG Business School
4 CES - Centre d'économie de la Sorbonne
5 PSE - Paris School of Economics
6 Thuongmai University
7 UP1 - Université Paris 1 Panthéon-Sorbonne

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.

Mots clés: Two-sector economy; Renewable resources; Pollution externality; Ramsey model; renewable resources; pollution externality

Domaines: Economies et finances

My Dam, Thai Ha-Huy, Cuong Le Van, Thi Tuyet Mai Nguyen. Economic dynamics with renewable resources and pollution. Mathematical Social Sciences, 2020, 108, pp.14-26. ⟨10.1016/j.mathsocsci.2020.08.002⟩. ⟨hal-04131071⟩