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2004•RePEc: Research Papers in EconomicsRequires access

Environmental Regulation and Economic Growth under Education Externalities

Paul Makdissi, Quentin Wodon

Open publisher page 9 citations

Abstract

Using an extension of Lucas' model of endogenous growth with education externality, we show that an environmental tax may increase growth. This is because the tax makes physical capital accumulation less attractive, thereby correcting for the underinvestment by agents in human capital.

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Using an extension of Lucas' model of endogenous growth with education externality, we show that an environmental tax may increase growth. This is because the tax makes physical capital accumulation less attractive, thereby correcting for the underinvestment by agents in human capital.

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Available abstract

Using an extension of Lucas' model of endogenous growth with education externality, we show that an environmental tax may increase growth. This is because the tax makes physical capital accumulation less attractive, thereby correcting for the underinvestment by agents in human capital.

Key concepts: Externality, Economics, Endogenous growth theory, Human capital, Environmental tax, Growth model, Capital (architecture), Physical capital

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