TY  - JOUR
AU  - Brock,William A.
AU  - Taylor,M. Scott
TI  - The Green Solow Model
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10557
PY  - 2004
Y2  - June 2004
UR  - http://www.nber.org/papers/w10557
L1  - http://www.nber.org/papers/w10557.pdf
N1  - Author contact info:
William Brock
Department of Economics
University of Wisconsin
1180 Observatory Drive
Madison, WI   537061393
E-Mail: wbrock@ssc.wisc.edu

M. Scott Taylor
IEE Canada Research Chair
Department of Economics
The University of Calgary
2500 University Drive, N.W.
Calgary, AB T2N 1N4
CANADA
Tel: 403/220-8912
Fax: 403/282-5262
E-Mail: mstaylor@ucalgary.ca
AB  - We demonstrate that a key empirical finding in environmental economics - The Environmental Kuznets Curve - and the core model of modern macroeconomics - the Solow model - are intimately related. Once we amend the Solow model to incorporate technological progress in abatement, the EKC is a necessary by product of convergence to a sustainable growth path. Our amended model, which we dub the  Green Solow', generates an EKC relationship between both the flow of pollution emissions and income per capita, and the stock of environmental quality and income per capita. The resulting EKC may be humped shaped or strictly declining. We explain why current methods for estimating an EKC are likely to fail whenever they fail to account for cross-country heterogeneity in either initial conditions or deep parameters. We then develop an alternative empirical method closely related to tests of income convergence employed in the macro literature. Preliminary tests of the model's predictions are investigated using data from OECD countries.
ER  -