Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/295794 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 16771
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The existence of an environmental limit in the Solow-Swan economy changes the nature of economic growth, but does not preclude it. When atmospheric greenhouse gases reach a predetermined absolute threshold, further growth requires a permanently expanding, resource-intensive mitigation effort. If the rate of technical progress in mitigation is too low, it becomes the effective constraint on economic growth. Yet growth in both quantities and relative prices remains a robust feature of this class of economies. It also characterizes the social planner's optimum that anticipates the costs of reaching the environmental limit abruptly.
Subjects: 
Solow-Swan growth model
Baumol cost disease
anthropogenic climate change
mitigation
price-driven economic growth
Ramsey optimal policy
JEL: 
O44
Q01
Q54
Document Type: 
Working Paper

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