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Indeterminacy, bifurcations and chaos in an overlapping generations model with negative environmental externalities

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  • Antoci, Angelo
  • Sodini, Mauro

Abstract

We analyze an overlapping generations model where agent’s welfare depends on three goods: leisure, environmental quality and consumption of a private good. We assume that the production process of the private good depletes the natural resource and that the consumption of the private good alleviates the damages due to environmental deterioration. In such context, we show that individuals’ reactions to environmental deterioration may lead to complex dynamics, in particular to the rise of periodic orbits and chaos.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13750.

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Date of creation: Feb 2009
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Handle: RePEc:pra:mprapa:13750

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Keywords: Defensive environmental expenditures; overlapping generations models; indeterminacy; undesirable economic growth;

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References

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  1. Bartolini, Stefano & Bonatti, Luigi, 2002. "Environmental and social degradation as the engine of economic growth," Ecological Economics, Elsevier, Elsevier, vol. 43(1), pages 1-16, November.
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  3. Angelo Antoci & Simone Borghesi & Marcello Galeotti, 2008. "Should we replace the environment?: Limits of economic growth in the presence of self-protective choices," International Journal of Social Economics, Emerald Group Publishing, Emerald Group Publishing, vol. 35(4), pages 283-297, March.
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  5. Antoci, Angelo & Galeotti, Marcello & Russu, Paolo, 2005. "Consumption of private goods as substitutes for environmental goods in an economic growth model," MPRA Paper 13664, University Library of Munich, Germany.
  6. Antoci, Angelo, 2009. "Environmental degradation as engine of undesirable economic growth via self-protection consumption choices," Ecological Economics, Elsevier, Elsevier, vol. 68(5), pages 1385-1397, March.
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  15. Antoci, Angelo & Bartolini, Stefano, 1999. "Negative externalities as the engine of growth in an evolutionary context," MPRA Paper 13908, University Library of Munich, Germany.
  16. Angelo Antoci & Stefano Bartolini, 1997. "Externalities and Growth in an Evolutionary Game," Department of Economics Working Papers, Department of Economics, University of Trento, Italia 9710, Department of Economics, University of Trento, Italia.
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Citations

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Cited by:
  1. Angelo Antoci & Mauro Sodini & Luca Zarri, 2012. "Relational Consumption and Nonlinear Dynamics in an Overlapping Generations Model," Working Papers, University of Verona, Department of Economics 13/2012, University of Verona, Department of Economics.
  2. Luca Gori & Mauro Sodini, 2014. "Indeterminacy and nonlinear dynamics in an OLG growth model with endogenous labour supply and inherited tastes," Decisions in Economics and Finance, Springer, Springer, vol. 37(1), pages 159-179, April.
  3. Angelo Antoci & Marcello Galeotti & Davide Radi, 2011. "Financial Tools for the Abatement of Traffic Congestion: A Dynamical Analysis," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 38(3), pages 389-405, October.
  4. OA. Carboni & P. Russu, 2012. "Global Indeterminacy in a Tourism Sector Model," Working Paper CRENoS 201230, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  5. Carboni, Oliviero A. & Russu, Paolo, 2013. "Linear production function, externalities and indeterminacy in a capital-resource growth model," Journal of Mathematical Economics, Elsevier, vol. 49(5), pages 422-428.
  6. Basseti, Thomas & Benos, Nikos & Karagiannis, Stelios, 2010. "How policy can influence human capital accumulation and environment quality," MPRA Paper 21754, University Library of Munich, Germany.
  7. Potrafke, Niklas, 2010. "The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter?," Munich Reprints in Economics, University of Munich, Department of Economics 19280, University of Munich, Department of Economics.
  8. Luciano Fanti & Luca Gori, 2012. "Public Expenditure on Health and Private Old-Age Insurance in an OLG Growth Model with Endogenous Fertility: Chaotic Dynamics Under Perfect Foresight," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 40(4), pages 333-353, December.
  9. Fanti, Luciano & Gori, Luca, 2010. "Fertility-related pensions and cyclical instability," MPRA Paper 20221, University Library of Munich, Germany.
  10. Antoci, Angelo & Galeotti, Marcello & Russu, Paolo, 2011. "Poverty trap and global indeterminacy in a growth model with open-access natural resources," Journal of Economic Theory, Elsevier, Elsevier, vol. 146(2), pages 569-591, March.
  11. Luca Gori & Mauro Sodini, 2011. "Nonlinear Dynamics in an OLG Growth Model with Young and Old Age Labour Supply: The Role of Public Health Expenditure," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 38(3), pages 261-275, October.
  12. Mauro Sodini, 2011. "Local and Global Dynamics in an Overlapping Generations Model with Endogenous Time Discounting," Computational Economics, Society for Computational Economics, Society for Computational Economics, vol. 38(3), pages 277-293, October.

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