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On the Joint Dynamics of Pollution and Capital Accumulation

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  • Dimitrios Varvarigos

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    Abstract

    The current paper offers a new explanation on the emergence of threshold effects and multiple equilibria, for which the high (low) income equilibrium is associated with high (low) environmental quality. This new explanation rests on endogenous technological choice in the presence of environmental taxation – an idea whose foundations find strong support from existing empirical evidence. Thus, the interactions between environmental policy and technology choice, within a framework that accounts for the health effects of pollution, can explain some of the observed differences in income, life expectancy and environmental quality among countries.

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    File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp11-05.pdf
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    Bibliographic Info

    Paper provided by Department of Economics, University of Leicester in its series Discussion Papers in Economics with number 11/05.

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    Date of creation: Oct 2010
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    Handle: RePEc:lec:leecon:11/05

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    Postal: Department of Economics University of Leicester, University Road. Leicester. LE1 7RH. UK
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    Related research

    Keywords: Pollution; Capital accumulation; Endogenous longevity; Multiple equilibria;

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    Cited by:
    1. Goenka, A. & Jafarey, S. & Pouliot, W., 2012. "Pollution, mortality and optimal environmental policy," Working Papers 12/07, Department of Economics, City University London.

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