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Wealth Heterogeneity and Escape from the Poverty-Environment Trap

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  • MASAKO IKEFUJI
  • RYO HORII

Abstract

A mutual link between poverty and environmental degradation is examined in an overlapping generations model. Environmental quality affects labor productivity and wealth dynamics, whereas wealth distribution determines the degree to which agents rely on technology that has a large environmental load, and therefore the evolution of environmental quality. This interaction creates a "poverty-environment trap," where a deteriorated environment lowers income, which, in turn, accelerates environmental degradation. We show that greater wealth heterogeneity is the key to escaping from the poverty-environment trap, although it can have negative effects on both the environment and output when not in the trap. Copyright 2007 Blackwell Publishing, Inc..

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Bibliographic Info

Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 9 (2007)
Issue (Month): 6 (December)
Pages: 1041-1068

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Handle: RePEc:bla:jpbect:v:9:y:2007:i:6:p:1041-1068

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  1. Duraiappah, Anantha K., 1998. "Poverty and environmental degradation: A review and analysis of the nexus," World Development, Elsevier, vol. 26(12), pages 2169-2179, December.
  2. Gary S. Becker & Kevin M. Murphy & Robert Tamura, 1994. "Human Capital, Fertility, and Economic Growth," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education (3rd Edition), pages 323-350 National Bureau of Economic Research, Inc.
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  10. Piketty, Thomas, 1997. "The Dynamics of the Wealth Distribution and the Interest Rate with Credit Rationing," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 173-89, April.
  11. Omer Moav, 2005. "Cheap Children and the Persistence of Poverty," Economic Journal, Royal Economic Society, vol. 115(500), pages 88-110, 01.
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Citations

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Cited by:
  1. Horii, Ryo & Ikefuji, Masako, 2014. "Environment and Growth," MPRA Paper 53624, University Library of Munich, Germany.
  2. Fabio Mariani & Agustin Pérez-Barahona & Natacha Raffin, 2008. "Life expectancy and the environment," Documents de travail du Centre d'Economie de la Sorbonne v08048, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  3. Eugenia Vella & Evangelos V. Dioikitopoulos & Sarantis Kalyvitis, 2012. "Green Spending Reforms, Growth and Welfare with Endogenous Subjective Discounting," DEGIT Conference Papers c017_045, DEGIT, Dynamics, Economic Growth, and International Trade.
  4. Bhattacharya, Haimanti & Innes, Robert, 2006. "Is There a Nexus between Poverty and Environment in Rural India?," 2006 Annual meeting, July 23-26, Long Beach, CA 21201, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  5. Emeline Bezin, 2013. "The dynamics of environmental concern and the evolution of pollution," Working Papers SMART - LERECO 201309, INRA UMR SMART.
  6. Natacha Raffin, 2009. "Environmental health and education : Towards sustainable growth," Post-Print halshs-00384500, HAL.
  7. Constant, Karine & Nourry, Carine & Seegmuller, Thomas, 2014. "Population growth in polluting industrialization," Resource and Energy Economics, Elsevier, vol. 36(1), pages 229-247.
  8. Hamdani, Nisar Hussain & Shah, Syed Akhter Hussain, 2005. "Earthquake 2005: Some Implications for Environment and Human Capital," MPRA Paper 9519, University Library of Munich, Germany.
  9. repec:hal:journl:halshs-00492178 is not listed on IDEAS

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