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The Cost of Pollution on Longevity, Welfare and Economic Stability

Author

Listed:
  • Natacha Raffin

    (University Paris Ouest Nanterre la Défense)

  • Thomas Seegmuller

    (CNRS & EHESS, Centre de la Vieille Charité)

Abstract

This paper presents an overlapping generations model where pollution, private and public health expenditures are all determinants of longevity. Public expenditures, financed through labour taxation, provide both public health and abatement. We study the role of these three components of longevity on welfare and economic stability. At the steady state, we show that an appropriate fiscal policy may enhance welfare. However, when pollution is heavily harmful for longevity, the economy might experience aggregate instability or endogenous cycles. Nonetheless, a fiscal policy, which raises the share of public spending devoted to health, may display stabilizing virtues and rule out cycles. This allows us to recommend the design of the public policy that may comply with the dynamic and welfare objectives.

Suggested Citation

  • Natacha Raffin & Thomas Seegmuller, 2017. "The Cost of Pollution on Longevity, Welfare and Economic Stability," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 683-704, November.
    • Handle: RePEc:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0041-3
    DOI: 10.1007/s10640-016-0041-3
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    Cited by:

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    3. Varvarigos, Dimitrios, 2023. "Cultural persistence in corruption, economic growth, and the environment," Journal of Economic Dynamics and Control, Elsevier, vol. 147(C).
    4. Anna Dugan & Alexia Prskawetz & Natacha Raffin, 2024. "The environment, life expectancy, and growth in overlapping generations models: A survey," Journal of Economic Surveys, Wiley Blackwell, vol. 38(5), pages 1593-1621, December.
    5. Boucekkine, Raouf & Seegmuller, Thomas & Venditti, Alain, 2021. "Advances in growth and macroeconomic dynamics: In memory of Carine Nourry," Mathematical Social Sciences, Elsevier, vol. 112(C), pages 1-6.
    6. Johanna Etner & Natacha Raffin & Thomas Seegmuller, 2016. ""The Falling Sperm Counts Story": A Limit to Growth?," AMSE Working Papers 1625, Aix-Marseille School of Economics, France, revised 04 Jul 2016.
    7. Zhao Zhang & Caoyuan Ma & Aiping Wang, 2023. "Environmental Governance, Public Health Expenditure, and Economic Growth: Analysis in an OLG Model," IJERPH, MDPI, vol. 20(4), pages 1-21, February.

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    More about this item

    Keywords

    Longevity; Pollution; Welfare; Instability;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium

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