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Pollution externalities, endogenous health and the speed of convergence in an endogenous growth model

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  • Klarl, Torben

Abstract

Based on a dynamic general equilibrium model, we study the important link between pollution, health and growth during transition which has not received much attention in the existing theoretical literature on (semi-) endogenous growth. The focus of this paper is on the transitional dynamics behavior, with an emphasis both, on the asymptotic as well as on the average speed of convergence. We calibrate the model for a typical OECD country. On the basis of dynamic welfare calculations, which consider transitional dynamics effects, we show that welfare differences are most pronounced for an economy, which values health relatively highly and where the environmental tax change is more than just marginal. Hence, if an economy moves towards a more sustainable society, the policy maker should take into consideration transitional dynamic effects.

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  • Klarl, Torben, 2016. "Pollution externalities, endogenous health and the speed of convergence in an endogenous growth model," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 98-113.
    • Handle: RePEc:eee:jmacro:v:50:y:2016:i:c:p:98-113
    DOI: 10.1016/j.jmacro.2016.09.003
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    Cited by:

    1. Xavier Pautrel, 2018. "Environmental Policy and Health in the Presence of Labor Market Imperfections," TEPP Working Paper 2018-09, TEPP.
    2. Torben Klarl, 2019. "The response of CO2 emissions to the business cycle: New evidence for the U.S," Bremen Papers on Economics & Innovation 1902, University of Bremen, Faculty of Business Studies and Economics.
    3. Klarl, Torben, 2020. "The response of CO2 emissions to the business cycle: New evidence for the U.S," Energy Economics, Elsevier, vol. 85(C).
    4. Nghiem, Son & Tran, Bach & Afoakwah, Clifford & Byrnes, Joshua & Scuffham, Paul, 2021. "Wealthy, healthy and green: Are we there yet?," World Development, Elsevier, vol. 147(C).
    5. Klarl, Torben, 2022. "Fragile robots, economic growth and convergence," Economic Modelling, Elsevier, vol. 112(C).
    6. Huiming Xie & Xiaopeng Wang & Manhong Shen & Chu Wei, 2022. "Abatement costs of combatting industrial water pollution: convergence across Chinese provinces," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(9), pages 10752-10767, September.
    7. Torben Klarl, 2022. "Fragile Robots, Economic Growth and Convergence," Bremen Papers on Economics & Innovation 2202, University of Bremen, Faculty of Business Studies and Economics.

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    More about this item

    Keywords

    Endogenous growth; Convergence speed; Health; Pollution;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • I10 - Health, Education, and Welfare - - Health - - - General
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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