On the Optimal Control of Pollution in a Human Capital Growth Model.

Summary On the one hand, the adoption of polluting technologies can enhance the factor productivity. on the other hand, pollution lowers the stock of human capital by weakening physical and mental performances, and short-ening the life expectancy at the end. To capture the impact of pollution on economic growth, we compute the optimal policy in an endogenous growth model `a la Lucas (1988) and we study the effects of pollution in the short and the long run.