Abstract
An endogenous growth model is developed to study the concept of sustainable growth in the context of two countries that exploit a common property renewable resource. The strategic interactions between countries are analysed within the framework of a differential game. In the absence of international policy coordination, too many renewable natural resources are used in production which boosts the rate of economic growth and depresses environmental quality. However, if apart from international environmental externalities there are international knowledge spill-overs in production, and productive government spending benefits the productivity of capital in other countries as well, international policy coordination may lead to a higher rate of economic growth and a lower environmental quality.
Hans Amman and Hessel Oosterbeek are gratefully acknowledged for their helpful discussion.
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© 1994 Springer Science+Business Media Dordrecht
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van der Ploeg, F., Ligthart, J.E. (1994). Sustainable Growth and Renewable Recources in the Global Economy. In: Carraro, C. (eds) Trade, Innovation, Environment. Fondazione Eni Enrico Mattei (FEEM) Series on Economics, Energy and Environment, vol 2. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-0948-2_11
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DOI: https://doi.org/10.1007/978-94-011-0948-2_11
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