Paper Title
Optimal Environmental Policy in a Growing Economy with Endogenous Labor Supply

Abstract
In this paper, we set up an endogenous growth model that incorporates environmental properties to discuss the effects of environmental expenditure. We find that an increase in the fraction of environmental expenditure will reduce pollution, but it has an ambiguous impact on the economic growth rate and social welfare. Through numerical analysis, there are inverted-U shaped impacts of environmental spending on growth and welfare, and we also can find out the optimal share of environmental spending for growth-maximization and welfare-maximization. Moreover, we finding out that the growth-max-share is lower than the welfare-max-share, and a higher positive externality from public infrastructure or lower negative externality from pollution stock will lead to both of growth-max-share and welfare-max-share is decreasing. In addition, the gap between growth-max-share and welfare-max-share is increasing with public infrastructure externality, but decreasing with pollution stock negative externality. Keywords - Economic Growth, Environmental Spending, Optimal Composition, Social Welfare.