Analysis of the Relationship Between Agriculture, Economic Growth, and the Environment Through Keynesian Models - The Agricultural Economics of the 21st Century - page 106

The questions related to the relationship between economic growth, employ-
ment, and environmental ethics and quality were debated by O'Riordan ( 2005 ),
Urama ( 2005 ), and Davenport and Mohamed ( 2007 ).
Employment and human living standards are fundamental aspects to take into
account in these discussions. From a sample of 179 countries, from 1970 to 2003,
Costantini and Monni ( 2008 ) built a model combining the contributions from the
Resource Curse Hypothesis and from the Environmental Kuznets Curve theories
within the context of human development, by trying to analyze the interactions
between economic growth, sustainability, and human living standards. The results
support the idea that for a sustainable development, investments in human capital
and in the quality of institutions are needed. These authors used variables related
with the GDP per capita, initial GDP per capita, investments, foreign direct
investment, openness, inflation, government effectiveness, rule of law, quality of
institutions, life expectancy at birth, diffused resources, natural resources, human
development, trade, industry value added, saving per capita, and CO 2 emissions.
Before, Culbertson ( 1989 ) discussed the questions associated with the domain of
the economic growth perspectives over the environmental and population aspects,
arguing for concerns in both these areas. In a similar way, Hueting ( 1985 ) analyzed
the interactions between economic growth, employment, and environmental poli-
cies and demonstrated that environmental regulations can create jobs.
The influence of economic growth upon the environment is not equal for
different social groups. In this line, for the period 1965-1993, in the Brazilian
economy, with times series data, Torras ( 2001 ) studied the income per capita,
taking into account the income shared by different social groups, resources used,
and the relationship between these factors. The results are not conclusive about the
economic growth in welfare earnings.
The importance of the spatial level in these analyses was given by Walker
( 1995 ). This author brought the discussion of the relationship between economic
growth and the environment as a national, regional, and local scale priority.
For Portugal, using linear programming models, Henriques and Antunes ( 2012 )
examined the influence of recently implemented policies in Portugal, derived from
the current crisis, on economic growth, social structure, and the environment. The
results suggest that economic growth is most efficient, only when energy use in the
economy is, also, efficient.
When we talk about economic growth, there are many theories described in
economic literature related with these issues. One of these theories is the Keynesian
approach about economic evolution and different spatial levels. Many studies,
based on the Keynesian theory, analyze economic growth utilizing the Verdoorn
law ( 1949 ). This law was later rediscovered by Kaldor ( 1966 , 1967 , 1970 , 1975 ,
1981 ) and more recently tested by many other authors. The Verdoorn law defends a
positive relationship between the growth rate of productivity and the growth rate of
output, between 0 and 1. In this relation the growth rate productivity is endogenous
and depends on the growth rate of the output, catching increasing returns to scale,
endogeneity of the factors, spillover effects, and learning by doing aspects, all of
which are questions defended before by other authors, but not in a systematic and