Rethinking Economic Growth from an Environmental Macroeconomics Perspective

Download or read book Rethinking Economic Growth from an Environmental Macroeconomics Perspective written by Salman Arshad and published by . This book was released on 2015 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses selected neoclassical economic growth models from an environmental macroeconomics perspective in the context of Greece. Discussion includes existing literature on reformulation of the underlying neoclassical production function to include environment as a factor input. Revisions to these economic growth models, mainly the Harrod-Domar and Swan-Solow models are reviewed with reference to the revised growth models developed by Thampapillai and Sinden (2013). Discussion on firm and consumer theory is also included considering the role they play in development of national policies. The paper attempts to further modify Thampapillai and Sinden's (2013) models for improvements in order to obtain more robust results for the utilization of environmental capital (KN) as a determinant of national income. These improvements are considered in terms of three propositions. The first proposition focuses on the recalculation of KN using a time variant price for emissions based on the concept of relative scarcity. The second proposition discusses estimation of accumulated KN utilization. The third proposition reconsiders the Cobb-Douglas factor utilization function by including KN as a separate factor rather than a composite of capital. Importance of linking consumer and firm theories with economic growth theories is also emphasized for ensuring sustainability.