Economic growth under stochastic population and pollution shocks
Economic growth under stochastic population and pollution shocks
We study dynamics of interactions among economic growth, population, and environmental quality when stochastic shocks in these systems display long-memory property. We make two important contributions. First, we show that the long-memory persistence in economic growth is determined jointly by the convergence speed of shocks in both environmental quality and population. Second, by simulating a modified Solow-Swan economy we demonstrate that the convergence-speed of shocks in these systems significantly affects the long-run growth trajectory of output. Our empirical examination evince that adjustment of output to long-run equilibrium is very slow, thanks to the slowly dissipating population and pollution shocks
314-345
Azomahou, Theophile
a396591c-558d-412a-855c-4dfb429ed2e4
Tapas, Mishra
218ef618-6b3e-471b-a686-15460da145e0
Parhi, Mamata
5e489f1d-9fe0-44b3-8027-bfa3ec6bfbd4
April 2015
Azomahou, Theophile
a396591c-558d-412a-855c-4dfb429ed2e4
Tapas, Mishra
218ef618-6b3e-471b-a686-15460da145e0
Parhi, Mamata
5e489f1d-9fe0-44b3-8027-bfa3ec6bfbd4
Azomahou, Theophile, Tapas, Mishra and Parhi, Mamata
(2015)
Economic growth under stochastic population and pollution shocks.
The Manchester School, 83 (3), .
(doi:10.1111/manc.12062).
Abstract
We study dynamics of interactions among economic growth, population, and environmental quality when stochastic shocks in these systems display long-memory property. We make two important contributions. First, we show that the long-memory persistence in economic growth is determined jointly by the convergence speed of shocks in both environmental quality and population. Second, by simulating a modified Solow-Swan economy we demonstrate that the convergence-speed of shocks in these systems significantly affects the long-run growth trajectory of output. Our empirical examination evince that adjustment of output to long-run equilibrium is very slow, thanks to the slowly dissipating population and pollution shocks
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Accepted/In Press date: 28 February 2014
Published date: April 2015
Organisations:
Southampton Business School
Identifiers
Local EPrints ID: 380119
URI: http://eprints.soton.ac.uk/id/eprint/380119
ISSN: 1463-6786
PURE UUID: 7e373700-e7a1-48f8-b27b-d9709f6fd457
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Date deposited: 03 Sep 2015 13:04
Last modified: 15 Mar 2024 03:51
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Contributors
Author:
Theophile Azomahou
Author:
Mamata Parhi
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