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On the Joint Dynamics of Pollution and Capital Accumulation

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  • Dimitrios Varvarigos

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Abstract

The current paper offers a new explanation on the emergence of threshold effects and multiple equilibria, for which the high (low) income equilibrium is associated with high (low) environmental quality. This new explanation rests on endogenous technological choice in the presence of environmental taxation – an idea whose foundations find strong support from existing empirical evidence. Thus, the interactions between environmental policy and technology choice, within a framework that accounts for the health effects of pollution, can explain some of the observed differences in income, life expectancy and environmental quality among countries.

Suggested Citation

  • Dimitrios Varvarigos, 2010. "On the Joint Dynamics of Pollution and Capital Accumulation," Discussion Papers in Economics 11/05, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:11/05
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    File URL: http://www.le.ac.uk/economics/research/repec/lec/leecon/dp11-05.pdf
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    Cited by:

    1. Aditya Goenka & Saqib Jafarey & William Pouliot, 2012. "Pollution, Mortality and Optimal Environmental Policy," Discussion Papers 12-05, Department of Economics, University of Birmingham.

    More about this item

    Keywords

    Pollution; Capital accumulation; Endogenous longevity; Multiple equilibria;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • 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

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