Suchergebnisse

AbstractWe investigate the growth effect of environmental policy in the Uzawa‐Lucas model with social status preference for education, finding for resource reallocation effect and substitution effect. The former implies decreasing human capital by raising the occupational cost of education, while the latter implies increasing human capital by enhancing the status‐seeking need for education. Thus, stricter environmental policy has a U‐shaped effect on the growth rate. However, the policy has no effect on the growth rate in the absence of social status preference. Our results imply that social status preference is essential for environmental policy to enhance growth rate.

This study examines the effect of pollution permits on economic growth and welfare using a research and development‐based model that measures social status by a person's wealth position in society. Under realistic parameter conditions, we find that a decrease in pollution permit levels leads to an increase in the economic growth rate and improves welfare in a high steady state via the marginal rate of substitution between wealth and consumption, which is influenced by the crowding out and resource reallocation effects. This channel depends on the presence of social status preference, and we refer to this as the substitution effect.