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Endogenous longevity and the joint dynamics of pollution and capital accumulation

Published online by Cambridge University Press:  22 October 2013

Dimitrios Varvarigos*
Affiliation:
Department of Economics, University of Leicester, Astley Clarke Building, University Road, Leicester LE1 7RH, UK. Tel: +44 (0) 116 252 2184. E-mail: dv33@le.ac.uk

Abstract

The current paper offers a new explanation of the emergence of 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 emission taxes – 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, may suggest a possible mechanism behind some of the observed differences in income, life expectancy and environmental quality among countries.

Type
Research Article
Copyright
Copyright © Cambridge University Press 2013 

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Supplementary material: PDF

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