Complementarity between environmental efficiency and labour productivity in a cumulative growth process
Keywords:environmental efficiency, labour productivity, economic growth
The aim of this paper is to analyse the potential complementarity between environmental efficiency and labour productivity in both theoretical and empirical terms. We define environmental efficiency as the ratio between income and pollutant emissions, and its growth rate may be a proxy of eco-innovations. As in the standard Post-Keynesian approach, the growth rate of labour productivity is considered here a proxy of technological innovations. The paper analyses first the theoretical elements that justify the hypothesis of a positive correlation between the two efficiencies. It then illustrates, through a Structuralist-Keynesian baseline model, how this complementarity is a necessary condition for cumulative growth that is socially and ecologically sustainable. It finally empirically investigates this complementarity through a dynamic panel analysis of the dynamics of European countries in the period 1992-2012.
JEL codes: O3, O4, Q5
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