Pollution effects on labor supply and growth
AbstractSome recent empirical contributions have pointed out a significant negative impact of pollution on labor supply. These impacts have been largely ignored in the theoretical literature, which, instead, focused on the case of pollution effects on consumption demand. In this paper, we study the short and long-run effects of pollution in a Ramsey model where pollution and labor supply are nonseparable arguments in households’ preferences. We determine sufficient conditions for existence and uniqueness of a longterm equilibrium and we show how large (negative) effects of pollution on labor supply may promotes macroeconomic volatility (deterministic cycles near the steady state) through a flip bifurcation.
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Bibliographic InfoPaper provided by European University at St. Petersburg, Department of Economics in its series CEEES Paper Series with number CE3S-05/13.
Length: 19 pages
Date of creation: 02 Nov 2013
Date of revision:
pollution; endogenous labor supply; Ramsey model.;
Other versions of this item:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O44 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
This paper has been announced in the following NEP Reports:
- NEP-AGR-2013-11-29 (Agricultural Economics)
- NEP-ALL-2013-11-29 (All new papers)
- NEP-DGE-2013-11-29 (Dynamic General Equilibrium)
- NEP-ENE-2013-11-29 (Energy Economics)
- NEP-ENV-2013-11-29 (Environmental Economics)
- NEP-MAC-2013-11-29 (Macroeconomics)
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