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Pollution and infectious diseases

Author

Listed:
  • Stefano Bosi

    () (EPEE, University of Evry)

  • David Desmarchelier

    () (Economix, University of Paris Ouest Nanterre La Défense)

Abstract

Recent empirical contributions highlight the negative impact of pollution on labor supply. This relationship is explained by two mechanisms: (1) pollution modifies agents' work-leisure trade-off as it deteriorates their working conditions (incentive effect); (2) a polluted environment is likely to generate more frequent epidemic outbreaks and to affect agents' immune systems (health effect). Bosi et al. (2015) explore the aggregate consequences of the incentive effect and show that it can generate endogenous fluctuations of the economic activity. The present paper rather focuses on the health effect as we study a Ramsey model augmented with the spread of infectious disease. We find that industrial pollution may generate limit cycles around an endemic steady state. More precisely, the economic system may undergo a transcritical bifurcation followed by two Hopf bifurcations near this steady state.

Suggested Citation

  • Stefano Bosi & David Desmarchelier, 2016. "Pollution and infectious diseases," Working Papers 2016.22, FAERE - French Association of Environmental and Resource Economists.
  • Handle: RePEc:fae:wpaper:2016.22
    as

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    File URL: http://faere.fr/pub/WorkingPapers/Bosi_Desmarchelier_FAERE_WP2016.22.pdf
    File Function: First version, 2016
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    References listed on IDEAS

    as
    1. Richard T. Carson & Phoebe Koundouri & Céline Nauges, 2010. "Arsenic Mitigation in Bangladesh: A Household Labor Market Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 407-414.
    2. Fernández, Esther & Pérez, Rafaela & Ruiz, Jesús, 2012. "The environmental Kuznets curve and equilibrium indeterminacy," Journal of Economic Dynamics and Control, Elsevier, vol. 36(11), pages 1700-1717.
    3. Mark Gersovitz & Jeffrey S. Hammer, 2004. "The Economical Control of Infectious Diseases," Economic Journal, Royal Economic Society, vol. 114(492), pages 1-27, January.
    4. Joshua Graff Zivin & Matthew Neidell, 2014. "Temperature and the Allocation of Time: Implications for Climate Change," Journal of Labor Economics, University of Chicago Press, vol. 32(1), pages 1-26.
    5. Goenka, Aditya & Liu, Lin & Nguyen, Manh-Hung, 2014. "Infectious diseases and economic growth," Journal of Mathematical Economics, Elsevier, vol. 50(C), pages 34-53.
    6. Geoffard, Pierre-Yves & Philipson, Tomas, 1996. "Rational Epidemics and Their Public Control," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(3), pages 603-624, August.
    7. Itaya, Jun-ichi, 2008. "Can environmental taxation stimulate growth? The role of indeterminacy in endogenous growth models with environmental externalities," Journal of Economic Dynamics and Control, Elsevier, vol. 32(4), pages 1156-1180, April.
    8. Stefano Bosi & David Desmarchelier & Lionel Ragot, 2015. "Pollution effects on labor supply and growth," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(4), pages 371-388, December.
    9. Doriana Delfino & Peter J. Simmons, "undated". "Positive and Normative Issues of Economic Growth with Infectious Disease," Discussion Papers 00/48, Department of Economics, University of York.
    10. Aditya Goenka & Lin Liu, 2012. "Infectious diseases and endogenous fluctuations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 125-149, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Pollution; SIS model; Ramsey model; Hopf bifurcation; Transcritical bifurcation;

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • I1 - Health, Education, and Welfare - - Health

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