Growth in an overlapping generation economy with a polluting non-renewable resource

Mardi | 2018-01-16
Salle des thèses 16h – 17h20

This paper analyses the effects of flow pollution implied by the use of non-renewable resources on an overlapping economy. Notably, it shows that, on the balanced growth path, flow pollution reduces the resource use and thus increases the ability of an economy to sustain a non-decreasing consumption path. In addition, the paper analyses decentralization strategies that are able to put the decentralized economy on an optimal balanced growth path. If the resource stock is privately owned by households, resource taxation is necessary and the optimal tax level is characterized. If the state owns the resource stock, it should entrust the resource management to a fund constraint by an extraction rule which is also defined.