PATTERNS OF GROWTH AND TECHNICAL CHANGE IN THE PRODUCTION OF GOOD AND BAD OUTPUTS

Resumen

In this article, we investigate the regularities of economic growth, taking into account that the process of production involves joint production of good and bad outputs. The good output is the gross domestic product (GDP) and the bad output is the emission of carbon dioxide from burning fossil fuels. The results can be summarized in four regularities: 1) the production of good and bad outputs increases during the economic growth process; good output production rises with the employment of labor and capital inputs; bad output production expands with the employment of capital input; 2) labor productivity and the capital-labor ratio increase, while capital productivity declines during the process of economic growth; 3) both emissions per unit of output and per unit of labor increase in the early stages of economic growth, declining after a certain threshold. This result is consistent with the hypothesis of an environmental Kuznets curve; 4) large differences exist both in the levels and in the growth rates of bad and good outputs, labor productivity, and CO₂ efficiency among countries.