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Wealth Heterogeneity and Escape from the Poverty-Environment Trap

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Author Info

  • Masako Ikefuji

    (Osaka University)

  • Ryo Horii

    (Osaka University)

Abstract

A mutual link between poverty and environmental degradation is examined in an overlapping generations model with environmental externality, human capital, and credit constraints. Environmental quality affects labor productivity and thus wealth dynamics, whereas wealth distribution determines the degree to which agents rely upon natural resources 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 the poverty-environment trap, although it has negative effects both on the environment and output when not in the trap.

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File URL: http://128.118.178.162/eps/dev/papers/0505/0505001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Development and Comp Systems with number 0505001.

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Length: 28 pages
Date of creation: 02 May 2005
Date of revision:
Handle: RePEc:wpa:wuwpdc:0505001

Note: Type of Document - pdf; pages: 28
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Web page: http://128.118.178.162

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Keywords: Poverty trap; Environmental degradation; Wealth distribution; Human capital.;

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Citations

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Cited by:
  1. repec:hal:journl:halshs-00384500 is not listed on IDEAS
  2. Horii, Ryo & Ikefuji, Masako, 2014. "Environment and Growth," MPRA Paper 53624, University Library of Munich, Germany.
  3. 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).
  4. Mariani, Fabio & Pérez-Barahona, Agustín & Raffin, Natacha, 2010. "Life expectancy and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 34(4), pages 798-815, April.
  5. Emeline Bezin, 2013. "The dynamics of environmental concern and the evolution of pollution," Working Papers SMART - LERECO 13-09, INRA UMR SMART.
  6. 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.
  7. 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.
  8. Thomas Bassetti & Nikos Benos & Stelios Karagiannis, 2013. "CO 2 Emissions and Income Dynamics: What Does the Global Evidence Tell Us?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 54(1), pages 101-125, January.
  9. repec:hal:journl:halshs-00492178 is not listed on IDEAS
  10. Constant, Karine & Nourry, Carine & Seegmuller, Thomas, 2014. "Population growth in polluting industrialization," Resource and Energy Economics, Elsevier, vol. 36(1), pages 229-247.

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