Markus Pasche

Technical progress, structural change, and the environmental Kuznets curve

Abstract The paper shows that under reasonable assumptions about technical progress a positive sustainable growth rate fails to exist. The argument is that a growing part of income has to be spent for continuing technical progress in order to compensate the pollution effects of growth. Hence in the long run either the sustainability condition will be violated or the growth rate must decline to zero. Furthermore, in finite time the level of wealth will decrease despite growing income and a constant pollution level, thus further growth is no longer reasonable. Similar arguments also hold for the environmental effects of structural change favoring less pollution-intensive economic activities. An evolutionary change of goods and production technology may shift the limits of growth and is hence a prerequisite for a long-run EKC.

What Can Be Learned from Behavioral Economics for Environmental Policy

Behavioural economics attracted attention from environmental economists: it should help to understand why people do not respond to environmental policy measures, based on neoclassical assumptions, as predicted by theory. Moreover, understanding motives and driving forces behind pro-social, pro-environmental and cooperative behaviour should help to improve environmental policy design. The aim of this paper is a critical discussion of the way how this branch of research is interpreting the explanatory power and the normative (policy) implications of behavioural economics.

Simulating Chaotic Dynamics in a Macroeconomic Trade-Off-Model

An expansive monetary impulse is analyzed in the framework of a nonlinear macroeconomic employment model. The analysis concentrates on the timepath and not on the trade off between inflation and unemployment rates. Solving nonlinear dynamical systems is often difficult or impossible, therefore computer simulation techniques are used.