Environmental Kuznets Curve

The effect of including the environment in the neoclassical growth model. MPRA Paper 68050, University Library of Munich, Germany.

This study begins with an exposition of basic principles of the theory of Optimal Control as this is used in the development of the theory of Economic Growth. Then, a brief presentation of the Neoclassical Model of Economic Growth follows and two applications are presented. In the first, optimal control techniques are used, in the context of neoclassical growth, to maximize the representative household’s total intertemporal welfare. In the second, the same problem is posed with two additional variables that affect welfare in opposing ways: pollution and abatement expenditures.