Implementing steady state efficiency in overlapping generations economies with environmental externalities
We consider in this paper overlapping generations economies with pollution resulting from both consumption and production. The competitive equilibrium steady state is compared to the optimal steady state from the social planner's viewpoint. We show that the dynamical inefficiency of competitive equilibrium steady state with capital-labor ratio exceeding the golden rule ratio still holds. Moreover, the range of dynamically efficient steady state capital ratios increases with the effectiveness of the environment maintainance technology, and decreases for more polluting production technologies. We characterize some tax and transfer policies that decentralize as a competitive equilibrium outcome the transition to the social planner's steady state.
|Date of creation:||01 Jul 2011|
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- María-José Gutiérrez, 2008.
"Dynamic Inefficiency in an Overlapping Generation Economy with Pollution and Health Costs,"
Journal of Public Economic Theory,
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- Pierre-André Jouvet & Pierre Pestieau & Gregory Ponthiere, 2010. "Longevity and environmental quality in an OLG model," Journal of Economics, Springer, vol. 100(3), pages 191-216, July.
- JOUVET, Pierre-André & PESTIEAU, Pierre & PONTHIERE, Grégory, "undated". "Longevity and environmental quality in an OLG model," CORE Discussion Papers RP 2377, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pierre-André Jouvet & Pierre Pestieau & Grégory Ponthière, 2007. "Longevity and environmental quality in an OLG model," EconomiX Working Papers 2007-19, University of Paris West - Nanterre la Defense, EconomiX.
- JOUVET, Pierre-André & PESTIEAU, Pierre & PONTHIERE, Gregory, 2007. "Longevity and environmental quality in an OLG model," CORE Discussion Papers 2007069, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Pierre-André Jouvet & Pierre Pestieau & Grégory Ponthière, 2010. "Longevity and environmental quality in an OLG model," Post-Print halshs-00754437, HAL.
- Raymond Gradus & Sjak Smulders, 1993. "The trade-off between environmental care and long-term growth—Pollution in three prototype growth models," Journal of Economics, Springer, vol. 58(1), pages 25-51, February.
- Smulders, J.A. & Gradus, R.H.J.M., 1993. "The trade-off between environmental care and long-term growth : Pollution in three proto-type growth models," Other publications TiSEM f3ec6de7-f996-4ac0-b872-0, Tilburg University, School of Economics and Management.
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