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Sulfur dioxide emissions and per capita income: a disaggregation of the effects of long-run and short-run income growth

ABSTRACT This paper investigates the links between growth in gross domestic product (GDP) and sulfur dioxide emissions by disaggregating income growth into long-term growth (the trend of GDP over time) and short-term growth (income fluctuations around the trend). Results indicate a substantial fixed component of sulfur dioxide emissions. Once income fluctuations are controlled for, the effect of changes in the scale of the economy over time can be distinguished from the effects of the changing composition of output and the state of technological development. Results indicate that at low levels of income, the composition and technology effects are associated with an increase in emissions; for high levels of income, the composition and technology effects are associated with a leveling off of emissions.