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The interaction between natural resources- and physical capital-intensive sectors in a behavioral model of economic growth

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  • Angelo Antoci

    ()

  • Paolo Russu

    ()

  • Serena Sordi

    ()

  • Elisa Ticci

    ()

Abstract

In this paper we examine the role played by environmental externalities in shaping the dynamics of a small open economy with two sectors (a farming sector and an industrial one), free inter-sectoral labor mobility and heterogeneous agents (workers/farmers and industrial entrepreneurs). We find that the stability properties of the equilibria and their features in terms of environmental preservation, welfare outcomes and sectoral allocation of labor are sensitive to the relative level of carrying capacity with respect to the rate of environmental pressure of the economic activities. We show that an endogenous process of industrialization associated to a reduction in farmers/workers’ welfare can emerge

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Bibliographic Info

Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 661.

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Date of creation: Nov 2012
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Handle: RePEc:usi:wpaper:661

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Related research

Keywords: Environmental negative externalities; welfare reducing industrialization; economic growth with heterogeneous agents;

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  1. Bretschger, Lucas & Smulders, Sjak, 2012. "Sustainability and substitution of exhaustible natural resources," Journal of Economic Dynamics and Control, Elsevier, vol. 36(4), pages 536-549.
  2. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2012. "Environmental externalities and immiserizing structural changes in an economy with heterogeneous agents," Ecological Economics, Elsevier, vol. 81(C), pages 80-91.
  3. Reddy, V. Ratna & Behera, Bhagirath, 2006. "Impact of water pollution on rural communities: An economic analysis," Ecological Economics, Elsevier, vol. 58(3), pages 520-537, June.
  4. Angelo Antoci & Paolo Russu & Elisa Ticci, 2011. "Investement inflows and sustainable development in a natural resource-dependent economy," Department of Economic Policy, Finance and Development (DEPFID) University of Siena 0311, Department of Economic Policy, Finance and Development (DEPFID), University of Siena.
  5. repec:fth:stanho:e-92-3 is not listed on IDEAS
  6. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2009. "Distributive impact of structural change: Does environmental degradation matter?," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 266-278, December.
  7. Peretto, Pietro F., 2012. "Resource abundance, growth and welfare: A Schumpeterian perspective," Journal of Development Economics, Elsevier, vol. 97(1), pages 142-155.
  8. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
  9. Lopez, Ramon E. & Anriquez, Gustavo & Gulati, Sumeet, 2007. "Structural change and sustainable development," Journal of Environmental Economics and Management, Elsevier, vol. 53(3), pages 307-322, May.
  10. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2008. "Structural change, economic growth and environmental dynamics with heterogeneous agents," MPRA Paper 13668, University Library of Munich, Germany.
  11. Barbier, Edward B., 2010. "Poverty, development, and environment," Environment and Development Economics, Cambridge University Press, vol. 15(06), pages 635-660, December.
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