Prof. Dr. Torben Klarl has published a new paper in the June issue of the renowned journal Energy Economics. This paper, entitled "Poverty and sustainable development around the world during transition periods," explores the question of whether countries can escape from poverty in a sustainable manner. For this purpose, the authors introduce an endogenous growth model that incorporates human, physical, and natural capital, as well as subsistence consumption. They provide a closed-form solution of the model to exploit the entire transitional phase of countries with unequal initial endowments of human capital and natural resources. The authors calibrate this model for 108 countries using data from the World Bank on countries’ physical capital and natural resource endowments. Using a battery of established consumption-based sustainability tests, they assess sustainability during the transition towards the economies’ steady-state. The authors find that most countries are characterized by sustainable development. For those countries not qualifying for sustainable development, they are able to quantify by how much initial capital endowments fall short of minimum requirements implied by sustainability tests.
