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Growth, Environmental Change and Business Cycles in aMulti-Regional Economy

Pages: --, Volume 1, Issue , 2019


Abstract: This paper generalizes the dynamic model of interdependence between regional economic growth and endogenous environment change proposed by Zhang (2016). The original model examines multi-regional dynamics with wealth and pollutant accumulation over time. Amenity which is dependent on the population and level of pollutants is an important variety for modelling regional agglomeration. The government decides environmental tax rates on production, consumption, wealth, income from wealth and housing. The economy is perfectly competitive. The dynamics of -region economy is described by differential equations. This paper generalizes the model by making all exogenous constant parameters as exogenous time-dependent parameters. We demonstrate business cycles due to different exogenous periodic perturbations.

Keywords: business cycles; periodic shocks; multi-region growth; amenity; pollutant accumulation; environmental policy; wealth accumulation
Mathematics Subject Classification:  

Received: July 2004; Revised: August 2004; Published: November 2004.