The Environmental Kuznets Curve (EKC) is often used to describe the relationship between economic growth and environmental quality. It refers to the hypothesis of an inverted U-shaped relationship between economic output per capita and some measures of environmental quality.

Trade-offs between environmental and profitability effects offer a helpful way to think about environmental values without relying on direct monetary measures. Environmental-profitability trade-off analysis involves two measures: an environmental one and a profitability one.

Many factors affect the tradeoff environment within a particular country, including the availability of raw materials, a skilled labor force, machinery for producing a product, technology and capital, market rate to produce that product on a reasonable time scale, and so forth.

The relationship between income inequality and economic development has popularly been characterized by the Kuznets’ inverted-U curve (Kuznets, 1955), which argued that income inequality tends to increase at an initial stage of development and then decrease as the economy develops, implying that income inequality will …

The reality Thankfully, there have been a multitude of studies which do just this. The major flaw in the EKC which the literature reveals is that it assumes all pollutants will behave in generally the same way in relation to income. However, empirical studies have revealed that this is not the case.

The Environmental Kuznets Curve (EKC) hypothesis explains an inverted U-shaped relationship between economic growth and environmental degradation (Figure 1), i.e., environmental pressure increases in the early stages of economic growth due to the increased release of pollutants and the extensive and intensive …

The results show that there is an inverted U-shaped curve between emission of sulphur dioxide or soot and GDP per capita. It can be explained by ever-cleaner industrial structure, quickly increasing environmental protection investment and stricter environmental policy.

economist Simon Kuznets

Kuznets is also known for the Kuznets curve, which hypothesizes that industrializing nations experience a rise and subsequent decline in income inequality. The rise in inequality occurs after rural labor migrates to urban areas and becomes socially mobile.

Specifically, rising inequality transfers income from low-saving households in the bottom and middle of the income distribution to higher-saving households at the top. All else equal, this redistribution away from low- to high-saving households reduces consumption spending, which drags on demand growth.