Analysis of the Relationship Between Agriculture, Economic Growth, and the Environment Through Keynesian Models - The Agricultural Economics of the 21st Century - page 102

Chapter 8
Analysis of the Relationship Between
Agriculture, Economic Growth,
and the Environment Through Keynesian
Models

V´tor Jo˜o Pereira Domingues Martinho

1 Introduction

There are many studies dealing with the relationship between economic growth and
environmental aspects, namely using the environmental Kuznets curve and the
endogenous growth theory, but few exist for Portugal and fewer or none using the
Keynesian models, namely those which consider the Verdoorn law.
The environmental Kuznets curve theory is based upon the idea that there is an
inverse relationship between the income per capita and environmental problems,
because in more advanced stages of economic growth there is more preoccupation
with the environment and, therefore, the countries are better equipped to protect the
environment. So, in some instances economic growth can prove to be beneficial for
living standards.
The endogenous economic growth theory appears to have some intentions
towards improving upon the neoclassical theory of the absolute convergence for
the same steady state. The idea of the endogenous theory is that economies
converge but for different steady states, depending on certain conditions, namely
that of human capital.
These concerns for economic growth and the environment have been increasing,
specifically because of the need to produce more in order to create more employ-
ment and the consequent problems that can create namely for the environment. The
whole economic system in developed and emergent countries is oriented towards
promotion of consumption, through aggressive marketing strategies, and as a
consequence to create more industries and more jobs. This orientation implies the
use of more resources, which can compromise availability for following genera-
tions, and creates more waste for the environment, by increasing the so-called