Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5098961 | Journal of Economic Dynamics and Control | 2010 | 18 Pages |
Abstract
We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental care, depending on how much they expect to live. In turn, environmental conditions affect life expectancy. As a result, our model produces a positive correlation between longevity and environmental quality, both in the long-run and along the transition path. Eventually, multiple equilibria may also arise: some countries might be caught in a low-life-expectancy/low-environmental-quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. We also discuss the welfare and policy implications of the inter-generational externalities generated by individual choices. Finally, we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Fabio Mariani, AgustÃn Pérez-Barahona, Natacha Raffin,