Environmental Economics and Policy Studies

, Volume 16, Issue 4, pp 397–443 | Cite as

Environment, growth, and technological change in a two-country overlapping-generations model

  • Shintaro NakagawaEmail author
  • Masayuki Sato
  • Rintaro Yamaguchi
Research Article Progress in Sustainable Development Economics


This paper investigates the effects of a change in environmental abatement technology on the accumulation of capital stock and on the global environment in a two-country overlapping-generations model. Among other issues, we focus on a situation where abatement improves in only one country. With comparative static analysis, we derive the sufficient and necessary condition in the initial steady states for unilateral improvement in abatement technology to improve the two-country global environment. In addition, we examine the effects of changes in several technologies on capital stock and on the global environment.


Global environment Abatement technology Overlapping-generations model 

JEL Classification

Q56 H87 



Earlier versions of this paper were presented at the EAERE 2011 annual conference, Rome, July 1st and at the SEEPS 2011, Nagasaki, September 24th. We thank Ken-Ichi Akao, Partha Dasgupta, Daisuke Ikazaki, Sjak Smulders, Koji Tokimatsu, Akira Maeda, Kazuhiro Ueta, an anonymous referee, and other participants at the conferences for their helpful comments and discussions. This work was partially supported by the Japan Society for the Promotion of Science KAKENHI Grant Number 23241019.


  1. Agnani B, Gutiérrez M-J, Iza A (2005) Growth in overlapping generation economies with non-renewable resources. J Environ Econ Manag 50:387–407CrossRefGoogle Scholar
  2. Ansuategi A, Escapa M (2002) Economic growth and greenhouse gas emissions. Ecol Econ 40:23–37CrossRefGoogle Scholar
  3. Ansuategi A, Perrings C (2000) Transboundary externalities in the environmental transition hypothesis. Environ Resour Econ 17:353–373CrossRefGoogle Scholar
  4. Barelli P, de Abreu Pessôa S (2003) Inada conditions imply that production function must be asymptotically Cobb–Douglas. Econ Lett 81:361–363CrossRefGoogle Scholar
  5. Batina RG, Ihori T (2005) Public goods: theories and evidence. Springer, BerlinGoogle Scholar
  6. Diamond PA (1965) National debt in a neoclassical growth model. Am Econ Rev 55:1126–1150Google Scholar
  7. Fisher EO, van Marrewijk C (1998) Pollution and economic growth. J Int Trade Econ Dev 7:55–69CrossRefGoogle Scholar
  8. Guscina A (2006) Effects of globalization on labor’s share in national income. IMF Working Paper, WP/06/294. Downloaded on 24 Sep 2013
  9. Goodwin BK, Grennes TJ (1994) Real interest rate equalization and the integration of international financial markets. J Int Money Finance 13:107–124CrossRefGoogle Scholar
  10. Harbaugh WT, Levinson A, Wilson DM (2002) Reexamining the empirical evidence for an environmental Kuznets curve. Rev Econ Stat 84:541–551CrossRefGoogle Scholar
  11. Ihori T (1996) International public goods and contribution productivity differentials. J Public Econ 61:139–154CrossRefGoogle Scholar
  12. John A, Pecchenino R (1994) An overlapping generations model of growth and the environment. Econ J 104:1393–1410CrossRefGoogle Scholar
  13. John AA, Pecchenino RA (1997) International and intergenerational environmental externalities. Scand J Econ 99:371–387CrossRefGoogle Scholar
  14. John A, Pecchenino R, Schimmelpfennig D, Schreft S (1995) Short-lived agents and the long-lived environment. J Public Econ 58:127–141CrossRefGoogle Scholar
  15. Krautkraemer JA, Batina RG (1999) On sustainability and intergenerational transfers with a renewable resource. Land Econ 75:167–184CrossRefGoogle Scholar
  16. Mourmouras A (1993) Conservationist government policies and intergenerational equity in an overlapping generations model with renewable resources. J Public Econ 51:249–268CrossRefGoogle Scholar
  17. Ono T (2005) The political economy of environmental taxes with an aging population. Environ Resour Econ 30:165–194CrossRefGoogle Scholar

Copyright information

© Springer Japan 2014

Authors and Affiliations

  • Shintaro Nakagawa
    • 1
    Email author
  • Masayuki Sato
    • 2
  • Rintaro Yamaguchi
    • 3
  1. 1.Faculty of EconomicsShimonoseki City UniversityShimonosekiJapan
  2. 2.Graduate School of Human Development and EnvironmentKobe UniversityKobeJapan
  3. 3.Nomura Research Institute Ltd.TokyoJapan

Personalised recommendations