The Green Solow model

We argue that a key empirical finding in environmental economics—the Environmental Kuznets Curve (EKC)—and the core model of modern macroeconomics—the Solow model—are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. We explain why current methods for estimating an EKC are likely to fail; provide an alternative empirical method directly tied to our theory; and estimate our model on carbon emissions from 173 countries over the 1960–1998 period.     

Empirical Analysis of National Income and SO2 Emissions in Selected European Countries

The linkage between per capita GDP and sulfur emissions for 12 Western European countries was analyzed over a period of more than 150 years. The analysis also looked at the impact of air pollution regulations on the shape of the income–pollution relationship. At both the aggregate and country levels, we find an inverted U-shaped relationship and the estimated turning points of most countries are plausible. In addition, environmental regulations are found to lower the EKC and they can also shift the turning point of the curve. In some cases, the shift is to the left and in a few to the right.     

海南省经济增长和工业“三废”污染关系探析

根据海南省2000～2006年经济与环境数据,分析经济发展与环境污染的相互关系,建立了海南省经济增长与环境污染水平的计量模型。研究表明：海南省经济增长与环境污染水平之间不完全符合典型的EKC特征,＂三废＂排放量呈明显的三次曲线特征,函数曲线呈＂U型＋倒U型＂。     

Health benefits of tunneling through the Chinese environmental Kuznets curve (EKC)

In this paper, we first add to what is a growing literature on the existence and nature of the environmental Kuznets curve (EKC) model for developing countries, by testing for the existence of an EKC for China using a panel data set of city-specific, annual ambient levels of SO₂ pollution. We find some support for both the typical inverted-U-shaped relationship and an N-shaped, cubic configuration. More significantly, we then explore the possibility of China's “tunneling” through the EKC, by using newer, cleaner technologies, and thereby avoiding some of the environmental degradation that had often accompanied economic growth. Specifically, we estimate and economically value the health benefits realizable to Chinese cities from successful efforts to “tunnel” under the EKC over the next generation.     

经济增长与环境的关系——基于对CO2环境库兹涅茨曲线的实证研究

在对"环境库兹涅兹假说"暗含的同质假设前提提出质疑的基础上,对165个国家进行分组检验后发现,"高工业、高收入"国家出现了"环境库兹涅茨曲线"的"倒U"型趋势,"低工业、低收入"国家出现微弱"倒U"型趋势,"低工业、高收入"国家表现出了"~"型趋势,而"高工业、低收入"国家环境污染与收入增长同步。     

Does S. Kuznets's belief question the Environmental Kuznets Curves?

Abstract.  This paper examines the link between pollution and income. The main purpose is to assess whether the introduction of income inequality in a Environmental Kuznets Curve (EKC) analysis can give new insights into the relationship between pollution and economic growth. The EKC hypothesis proposes that there is an inverted U‐shape relation between environmental degradation and income per capita. We question this common result, in a simple model where the income inequality evolution is exogenous and where the planner could use only one instrument. For a set of parameter values we find, for example, a two‐hump curve. JEL classification: D3, H4, Q2.     

New evidence on the convergence of international income from a group of 29 countries

This paper updates and extends the time-series evidence on the convergence of international incomes using a set of 29 countries over the period 1900–2001. Time-series tests for stochastic convergence are supplemented with tests which provide evidence on the notion of “β-convergence” predicted by the Solow model. The evidence indicates that the relative income series of 21 countries are consistent with stochastic convergence, and that β-convergence has occurred in at least 16 countries at some point during the twentieth century. Further examination of the properties of the β-convergence test provides anecdotal evidence of conditional convergence in three additional countries for which the convergence hypothesis was initially rejected. Consideration of convergence clubs strengthens the evidence in favor of convergence. Analysis of the cross-country dispersion of incomes over time also suggests that convergence has occurred over the 1900–2001 period, particularly within certain clubs, with structural breaks associated with World War II in many countries causing a break in the convergence process.      

Spatial analysis of urban growth in Spain, 1900–2001

The purpose of this paper is to improve the knowledge of the Spanish urban system. We study the evolution of population growth among the group of 722 municipalities included in the Spanish urban areas over the period 1900–2001. A spatial SUR model is estimated for Zipf’s law and shows the existence of two main phases: divergence (1900–1980) and convergence (1980–2001). Then, the cross-sectional distribution of urban population is characterized by means of nonparametric estimations of density functions and the growth process is modeled as a first-order stationary Markov chain. Spatial effects are finally introduced within the Markov chain framework using regional conditioning. This analysis shows a low interclass mobility, i.e., a high-persistence of urban municipalities to stay in their own class from one decade to another over the whole period, and the influence of the geographical environment on urban population dynamism. Previous versions of this paper were presented at the 45th Congress of the European Regional Science Association (Vrije Universiteit, Amsterdam, Netherlands, August 23–27, 2005) and at the International Workshop on Spatial Econometrics and Statistics (Rome, Italy, May 25–27, 2006). We would like to thank two anonymous referees, M. Bosker, P. Cheshire, A. Carrington, B. Fingleton, R. Guillain, E. Lopez-Bazo, J. Paelinck and the other participants of these meetings for their valuable comments. Coro Chasco acknowledges financial support from the Spanish Ministry of Education and Science SEJ2006-14277-C04-01. The usual disclaimers apply.     

At the origin of post-war mainstream of economics: On pareto’s influence on economic theory

Allais (1968) maintained that Pareto’s influence on the development of economics was felt only after considerable delay and was confined to Italy and France. This paper provides a reconstruction of the intellectual dissemination of Pareto’s thought through Europe and the United States in the period 1900–1940, showing that it was influential in the period from c.1900 to the mid-1920s and that in the 1930s it was highly important in the foundation of mainstream post-war economic theory, although in a more elusive way than before.(JEL:B13, B16, B21, B23, B31)     

Functional sensitivity of testing the environmental Kuznets curve hypothesis

Conventional tests for the environmental Kuznets curve (EKC) hypothesis mostly apply a quadratic equation in modeling the non-linear relationship between environmental indices (such as air pollutants) and welfare measures (such as income per capita). If their inverted-U shaped pattern is empirically accepted with two significant regressors, the income per capita and its square transformation, the EKC hypothesis is supported. Using an OECD sample, this paper shows that the validity of testing the EKC hypothesis is sensitive to how we transform income non-linearly in sulfur and carbon EKC regressions. This paper carries out experiments on different powers of γ for transforming income non-linearly and concludes that only when 0 < γ < 1 and 1 < γ < 2 will the EKC regression demonstrate a testable non-linear cointegration relationship between the two air pollutants and income per capita. In the generalized EKC regressions estimated in this paper, although we find sulfur and carbon EKC patterns in the OECD sample, none of the EKC regressions using different γ is a cointegrating equation. This finding implies an inside critique to the EKC literature that failure of cointegration of the conventional EKC regression is not because of using the quadratic functional form, but because of the fundamentally spurious relationship between the trends of pollutants and income levels.     

Functional sensitivity of testing the environmental Kuznets curve hypothesis

Conventional tests for the environmental Kuznets curve (EKC) hypothesis mostly apply a quadratic equation in modeling the non-linear relationship between environmental indices (such as air pollutants) and welfare measures (such as income per capita). If their inverted-U shaped pattern is empirically accepted with two significant regressors, the income per capita and its square transformation, the EKC hypothesis is supported. Using an OECD sample, this paper shows that the validity of testing the EKC hypothesis is sensitive to how we transform income non-linearly in sulfur and carbon EKC regressions. This paper carries out experiments on different powers of γ for transforming income non-linearly and concludes that only when 0 < γ < 1 and 1 < γ < 2 will the EKC regression demonstrate a testable non-linear cointegration relationship between the two air pollutants and income per capita. In the generalized EKC regressions estimated in this paper, although we find sulfur and carbon EKC patterns in the OECD sample, none of the EKC regressions using different γ is a cointegrating equation. This finding implies an inside critique to the EKC literature that failure of cointegration of the conventional EKC regression is not because of using the quadratic functional form, but because of the fundamentally spurious relationship between the trends of pollutants and income levels.     

江西省经济增长与工业三废排放水平关系的实证研究

基于环境库兹涅茨曲线（EKC）假说,采用江西省1990—2008年的经济与环境数据,通过回归二次和三次多项式简化型模型检验了经济与环境质量之间的关系。结果表明：江西省的EKC曲线与经典倒U型EKC曲线形态不同,除工业固体废物排放量以外,其他环境质量指标与人均GDP的演变轨迹呈U型＋倒U型（N型）,江西省总体环境质量与经济发展处于向好趋势。在此基础上提出了若干政策建议。     

On the Robustness of Robustness Checks of the Environmental Kuznets Curve Hypothesis

Since its first inception in the debate on the relationship between environment and growth in 1992, the Environmental Kuznets Curve hypothesis (EKC hereafter) has been subject of continuous and intense scrutiny. The most recent line of investigation criticizes the EKC hypothesis on more fundamental grounds, in that it stresses the lack of sufficient statistical testing of the empirical relationship and questions the very existence of the notion of EKC. Attention is in particular drawn on the stationarity properties of the series involved—per capita emissions or concentrations and per capita GDP—and, in case of presence of unit roots, on the cointegration property that must be present for the EKC to be a well-defined concept. Only at that point can the researcher ask whether the long-run relationship exhibits an inverted-U pattern. On the basis of panel integration and cointegration tests for sulfur, Stern (2004) and Perman and Stern (1999, 2003) have presented evidence and forcefully stated that the EKC hypothesis does not exist. In this paper we ask whether similar strong conclusions can be arrived at when carrying out tests of system fractional integration and cointegration. As an example we use the controversial case of carbon dioxide emissions. The results show that more EKCs come back into life relative to traditional integration/cointegration tests. However, we confirm that the EKC hypothesis remains a fragile concept.      

洱海流域城乡经济发展与洱海湖泊水环境保护的实证分析

以云南大理市洱海及其流域为例,通过建立湖泊水质指标演变与流域人均GDP增长的计量模型,对环境库兹涅茨曲线(EKC)进行新的检验发现:基于时间序列数据的洱海水质指标与流域人均GDP的拟合曲线,与环境库兹涅茨曲线相比较呈现了不同特征和形状:既有经典的倒U型的曲线,也有U型、N型和同步型的曲线。倒U型的曲线表明洱海治理措施的有效性;U型、N型和同步型的曲线表明湖泊面源污染和富营养化控制的复杂性,湖泊面源污染和富营养化控制需要寻求的新解决思路和多种措施的配合。在借鉴国外经验和国内有价值的研究成果的基础上,本研究将有利于通过结构调整对面源污染从源头实施总量控制,推进"工程治污"与"结构控源"措施的优化与配合,辅助湖泊水环境的规划与管理及决策。     

Temporal and Spatial Homogeneity in Air Pollutants Panel EKC Estimations

Although panel data have been used intensively by a wealth of studies investigating the GDP-pollution relationship, the poolability assumption used to model these data is almost never addressed. This paper applies a strategy to test the poolability assumption with methods robust to functional misspecification. Nonparametric poolability tests are performed to check the temporal and spatial homogeneity of the panel and their results are compared with the conventional F-tests for a balanced panel of 48 Spanish provinces on four air pollutant emissions (CH₄, CO, CO₂ and NMVOC) over the 1990–2002 period. We show that temporal homogeneity may allow the pooling of the data and drive to well-defined nonparametric and parametric cross-sectional U-inverted shapes for all air pollutants. However, the presence of spatial heterogeneity makes this shape compatible with different time-series patterns in every province—mainly increasing or decreasing depending on the pollutant. These results highlight the extreme sensitivity of the income-pollution relationship to region- or country-specific factors.      

A new model of income distribution: the κ-generalized distribution

This paper proposes a three-parameter statistical model of income distribution by exploiting recent developments on the use of deformed exponential and logarithm functions as suggested by Kaniadakis (Phys A 296:405–425, 2001; Phys Rev E 66:056125, 2002; Phys Rev E 72:036108, 2005). Formulas for the shape, moments and standard tools for inequality measurement are given. The model is shown to fit remarkably well the personal income data for Great Britain, Germany and the United States in different years, and its empirical performance appears to be competitive with that of other existing distributions.     

Saving and habit formation: evidence from Dutch panel data

This paper focuses on the role of habit formation in individual preferences. In this study, the model of Alessie and Lusardi (Econ Lett 55:103–108, 1997) and its extension by Guariglia and Rossi (Oxf Econ Pap 54:1–19, 2002) are considered. Our empirical specifications are based on their closed-form solutions, where current saving is expressed as a function of lagged saving and other regressors. In our study, we use a longitudinal data set from the Netherlands that allows us to disentangle the role of habit formation from unobserved heterogeneity. Contrary to most other studies using survey data, we find evidence in favor of habit formation. However, the magnitude of the habit formation coefficient is rather small. Income uncertainty seems to affect saving behavior of Dutch households.     

The Environmental Kuznets Curve and Flow versus Stock Pollution: The Neglect of Future Damages

In this paper we offer a possible explanation for the empirical finding that the pollution-income relationship (PIR) for flow pollutants is an environmental Kuznets curve (EKC), i.e. inverted-U shaped, but that the PIR for stock pollutants is monotonically rising. We analyse an overlapping generations model with two pollutants: The flow pollutant causes immediate damages, but the stock pollutant harms the environment only in the future. Hence, a succession of myopic governments lets stock pollution grow with income. In contrast, the flow pollutant follows an EKC whose downturn might be caused by the neglect of future damages and by ever rising stock pollution: Without the stock pollutant the PIR for the flow pollutant can increase monotonically. We also show that the turning point of the EKC for the flow pollutant lies at lower levels of income and of flow pollution if stock pollution is high and harmful. This casts doubts on most empirical EKC studies because they assume that the turning point occurs at the same income level in all countries. However, it is consistent with recent empirical findings that the income level at the turning point of the EKC varies across countries.     

The econometrics of the environmental Kuznets curve: an illustration using Australian CO2 emissions

Four econometric issues associated with the estimation and testing of the environmental Kuznets curve (EKC) are considered: (i) model specification with respect to the order of the polynomial, (ii) model specification with respect to the use of linear or log-linear specifications, (iii) integration and cointegration considerations, and (iv) missing variables and time trends. These issues are examined in reference to Australian data on four measures of CO2 emissions and three measures of per capita income. While evidence is provided for an inverted U-shaped EKC, the results cannot be generalized. It is concluded that without the use of sensitivity analysis, the results are typically fragile.